The FSCS revealed the figures this morning in its annual report.

The report stated: “We have seen an increasing number of complex Self-Invested Personal Pension related claims during the year.

“We compensated 3,565 customers who had been wrongly advised to shift their retirement savings from occupational schemes into risky assets held within SIPPs. The cost of these SIPP-related claims in 2016/17 was £105m.

“SIPP-related claims typically involve advice given by financial advisers to move pension savings out of existing occupational pension arrangements and invest in other investments within SIPP wrappers.

“These investments are often high risk and unsuitable for most investors. Their riskiness means some investments inevitably fail and become illiquid. This trend began two years ago and has continued this year, with claims against an increasing number of failed life and pensions advisers.

“Over the past year, FSCS has paid compensation of £105m for SIPP-related claims compared with £78m in the previous year – an increase of 35 per cent.”

Increasing claims associated with SIPPs were among the reasons the FSCS had to raise three supplementary levies totalling £114m during the year. A repayment of £50m in the Investment Intermediation class brought the total levy for the year to £738m.

Total compensation costs have increased by £104m. The largest increase, of £66m, came in the General Insurance Provision class which was attributable to “unforeseen compensation costs for the failures of Enterprise and Gable”.

Life and Pensions Intermediation compensation costs increased by £21m because of SIPP-related claims.

The report showed FSCS chief executive Mark Neale’s annual pay package was between £315,000 and £320,000 in the year ending 31 March. His basic salary was about £255,000.

Mr Neale said: “The 2016/17 year has shown once again that our workload is volatile and unpredictable. The failures of Enterprise Insurance Company PLC (Enterprise) and Gable Insurance AG (Gable) were complicated because of the range of products sold and because of the complex network of brokers and sub-brokers who managed those sales.

“We have worked closely with the insolvency practitioners, overseas authorities, the PRA and the FCA to provide new cover for policyholders where we can and to return funds to customers quickly when that is not an option.

“These failures – combined with increasing claims associated with Self-Invested Personal Pension plans (SIPPs) – meant we had to raise three supplementary levies totalling £114m during the year.”