Anger is growing in steel towns in Wales over the over-selling of pensions
The UK Parliament’s expenditure watchdog has been tasked with investigating financial sector regulators to deal with the scandal of the multibillion-pound pension abuse sales victims claim to have left behind. “Cowboy advisers… making fun of their villa. “
Labor lawmakers Nick Smith and Stephen Kinock Financial Conduct Authority We were unable to respond to the 2017 scandal after media reported that a financial advisor motivated by high fees and charges landed at the Tata plant Steel – particularly the Port Talbot site in South Wales – and was trying to monetize workers with their valuable pension benefits.
Smith, member of the House of Commons Public Accountancy Committee, member of Blaenau Gwent, said:
“Thousands of suspected steel workers. Bad transfer advice was given and I lost tens of thousands of pounds as a result. The Audit Board should investigate how this has been handled. “
Misselling was much more prevalent than steelworkers. Between April 2015 and September 2018, around 235,000 final members of the salary-type pension scheme from various sectors received transfer advice with an average transfer value of £ 352,000, according to data from regulators. paddy field.
About 69% of those people were asked to relocate, but in 2018 the FCA looked at 18 companies that referred 48,000 cases and found that only 48% of the recommendations were appropriate. We advise those affected to seek compensation.
Experts warn it could be the biggest fake pension sales scandal in decades.
There is growing anger among steel workers in South Wales who have allegedly been mis-sold over the way they have been persuaded. Defined Benefit Retirement Transition And with support from the FCA.
“The cowboy advisers laugh at their villas while we have a sleepless night,” said David Neilly, a former member of the British Steel Pension System, who attended an FCA sponsored event in Swansea last week. . , Claim compensation. “FCA’s efforts come too late.
The FCA expects advisers to assume that abandoning defined benefit pensions, which provide secure anti-inflation income in survivor pensions, is not in most interests. people.
However, between 2017 and 2018, around 7,700 BSPS members transferred secure benefits to a stock market-based pension plan after receiving referrals from FCA-certified advisers.
The total amount transferred was around £ 2.8bn and the average pot size was £ 350,000. However, in June 2020, the FCA said a review found that only a fifth of the recommendations to hand over to BSPS members were appropriate.
So far only around 1,200 complaints related to BSPS transfers have been submitted to the Financial Ombudsman Service or the Financial Services Compensation Scheme, which can compensate losses incurred due to improper transfers up to £ 160,000. He was. This resolves complaints when a business or advisor goes bankrupt but can only pay £ 85,000.
Steel workers attending an FCA event in Swansea said they were embarrassed to deal with the complaint.
A 56-year-old steelmaker attending the event was asked to transfer a safe pension of £ 290,000 to a risky stock market-based plan in 2017. I followed my mate who was receiving transfer advice. “
“I have known my advisor for 20 years and he made all my mortgages and made my transfer,” said another steelmaker who wished to remain anonymous. “I don’t know if the advice I received is correct.”
After a 30-minute session with an FOS representative, the man was advised to file a complaint with his financial advisor. He said FOS would do it for him.
Other steel workers present at the event were unhappy that they had not been encouraged to file an earlier complaint before the advisers went into liquidation when the potential compensation was large. paddy field.
The company that advised Neely was one of 13 companies that went bankrupt after providing transfer advice to BSPS members. “People didn’t know they would get the complaint any sooner, so it could be exacerbated by thousands of pounds,” Neely said.
The FSCS has so far resolved 482 complaints. BSPS members total around £ 21million and average payments of around £ 43,000. 153 additional requests were processed.
However, some people were angry with the way their claims were being assessed.
Leg Bennett, 58, a former BSPS member, said he was not paid by FSCS despite being classified as having received inappropriate transfer advice in 2017. “I am spending a sleepless night at this topic, ”Bennett said. “The conditions for calculating the FSCS are not clearly defined and this is unfair.”
Craig Williams, a steelmaker in Port Talbot, said the FSCS was punished for not having a financial advisor when he submitted his application. He said it had not been revealed by the FSCS that it could cost him thousands of pounds in compensation.
“I had no idea how it would affect me,” he said. “It’s very stressful.”
Some BSPS members were embarrassed by the lack of regulatory action against companies facing large numbers of abuse-of-sale complaints.
“People who gave me bad advice are still trading,” said a steelmaker who attended the FCA event but wished to remain anonymous. “He drives the city [luxury car].. ”
He said he now worries his retirement pot, which has been invested in the stock market and increases an annual membership fee of 1.9%, will not last long. “I feel deprived not only of my retirement but also of the future,” he said.
Aberavon Kinock and Smith MPs, including Port Talbot, called on the FCA to launch an industry-wide bailout for BSPS members. “It’s time to end the scandal,” Kinock said.
The call was supported by Mick McAteer, a former member of the FCA board of directors and its predecessor, the Financial Services Authority (now co-director of the Financial Services Authority, a UK research and non-profit group) .
“This could be one of the worst fake sales scandals these days,” he said. “Regulators have an obligation to take ownership of the process and to ensure that all those affected receive appropriate remedies.”
FCA Executive Director of Consumer and Competition Sheldon Mills, who attended the event in Swansea, said a decision will be made on BSPS’s rescue system within the next six months. He added that the FCA will be launching more individual events for steel workers in other regions, as the events in Swansea are oversubscribed.
“We are committed to helping steel workers resolve their grievances,” he said. “It is important that this is the center of our efforts. “
The FSCS rejected the idea that a claimant accompanied by an advisor would receive “additional compensation”. The customer’s compensation “reflects the position of the customer at the time the claim was assessed,” he said.
“We are currently considering potential research on the regulation of financial services with a focus on consumer protection,” said the Board of Audit, an expenditure watchdog.
“Our chief audit executive has not yet decided whether we can move on,” he added.
Additional report by Laura Noonan
Anger Grows in Steel Towns in Wales over Poor Selling of Pensions Source Link Anger grows in Steel Towns in Wales over improper selling of pensions