In its November outlook magazine the FSCS revealed the deficit and said the size of the levy would be announced in January.

Mark Neale, FSCS chief executive, said: “The foreground is dominated by the continuing growth in pensions claims.

“Despite raising a levy on life and pensions advisers in April of £75m – the maximum allowable for nine months from June 2018 to March 2019 – we expect a deficit by year end of just under £70m.

“This will, I am afraid, necessitate a supplementary levy falling on the retail pool.

“We shall announce the size of that supplementary levy in January.

“These short-term financial implications should not, however, obscure the longer-term challenge of tackling the causes of rising pension claims and so stemming future compensation costs.

FSCS November outlook  

“We see some common factors underlying these claims.

“We see consumer vulnerability as people seek to maximise their income in retirement and are persuaded to make unwise investments, usually held within a Self-Invested Personal Pension (SIPP), or to trade in valuable rights in defined benefit schemes.

“We see many examples of mis-selling as both regulated, but also increasingly unregulated advisers, promote risky, illiquid investments.

“We see providers who fail to perform rudimentary due diligence on these investments.

“We see advisory businesses which are under-capitalised or under-insured for the risks they run.

“And we see directors and advisers involved in failure who re-invent themselves and come back for more.”

Mr Neale said he believed there were “steps we can take” to “mitigate these risks” in partnership with professionals and regulators.