Liberty SIPP has been declared in default, after being placed into administration on 27 April 2020.

The Financial Services Compensation Scheme (FSCS) declared the firm failed yesterday, opening the door to the start of compensation claims from customers.

The failure is likely to cost the FSCS millions at a time when it is already under fire for ever-increasing levy fees.

Liberty SIPP was placed in administration following a large number of complaints about clients being placed into high-risk non-standard investments.

Liberty SIPP sold its business and customer assets to EBS Pensions, part of Embark Group, in October 2018 after Liberty was faced with mounting claims, some submitted via Claims Management Companies.

The legal entity Liberty SIPP Limited was not part of the sale, but the move resulted in the Liberty SIPP business being wound up.

The company was advised by the Financial Ombudsman Service that it was insolvent based on the number of potential claims relating to high-risk non-standard investments and was advised it should enter administration to provide protection for creditors including former customers.

Following the firm being placed in default, the Financial Services Compensation Scheme said that consumers and advisers who have already complained to the Financial Ombudsman Service (FOS) will be contacted by the FOS in regards to next steps.

Those who have no already made a claim against Liberty SIPP can still do so via the FSCS.