Blaenau Gwent Labour MP Nick Smith has called for action against adviser firms who wrongly advised more than 8,000 steelworkers to transfer their pensions.
In a speech at the House of Commons, Smith called for more action to help those who had “been targeted by unscrupulous pensions advisers”.
He said: “There were nearly 8,000 transfers out of the scheme, and we know that 872 of those were advised by firms that were eventually required to stop advising. Too many people saw their hard-earned pension pots put at risk, including constituents of mine who were worried sick about their future.
“The pension’s debacle that hit steelworkers last winter should never have happened.”
Smith also pointed out that, while interest in steel pension transfers was increasing from late April 2017, it was not until November of last year that the Financial Conduct Authority (FCA) began to take action.
Pensioners who had been affected, he continued, were required to go through a lengthy process to find out basic information and had to search the FCA’s register “to decipher legal notes that were sometimes closer to double Dutch than plain English”.
During his speech, Smith called out Active Wealth UK, a firm closely linked to the British Steel scandal, pointing out the company’s director Darren Reynolds had failed to turn up to Parliament to answer questions on the issue.
“The ability of his company to advise on pension transfers was restricted and the company is now in liquidation,” he added.
The Financial Services Compensation Scheme has already paid out more than £500,000 for claims related to Active Wealth while 162 claims are still open.
‘Should never have happened’
Smith said the scandal happened because “we have a system of pensions and financial regulations that fails to protect hard-working people”.
He added the “chancellor needs to put this right and to get on the side of the working people,” while the government needed “to review current regulation on pensions advice regularly, make sure that any wrongdoing is aggressively dealt with and ensure that consumer information is easy to find and to understand”.
The FCA and the Pensions Regulator have said they are working better together, Smith noted, before adding: “We also need stricter penalties, better information and far tighter oversight.”