MP Kinnock to meet steelworkers over fresh pension transfer concerns

Hannah Godfrey reports...

MP Stephen Kinnock is to meet with former British Steel pension scheme members over fresh concerns about advice they received to transfer away from their defined benefit (DB) pensions.

The meeting will take place in the Twelve Knights hotel in Port Talbot on 1 February and will focus on emerging concerns that poor advice was given to members of the British Steel Pension Scheme (BSPS). The meeting is also open to workers from other DB schemes who feel they have been misadvised.

Kinnock (pictured), the MP for Aberavon, will attend alongside Echelon Wealthcare managing director Alastair Rush, a founding member of the pro bono initiative CHIVE. Former Financial Conduct Authority (FCA) man Rory Percival and Clarke Willmott solicitor Philippa Hann, who is representing some of the steelworkers in their hunt for compensation, will also be in attendance.

Kinnock said he was increasingly concerned that advice firms besides Active Wealth UK – the firm at the centre of the British Steel saga that worked with unregulated introducer Celtic Wealth Management and offered steelworkers a DB transfer for just £1,500 – gave poor advice to steelworkers.

The Labour MP also accused the FCA of failing to notify steelworkers, who were advised by other firms in the area and subsequently lost their DB transfer permissions, of the change in permissions of their pension transfer specialist.

Wales-based Pembrokeshire Mortgage Centre and West Wales Financial Services, which both advised steelworkers on their pensions, lost pension transfer permissions and then pulled out of the market altogether. Adviser firm Bartholomew Hawkins still has permission suspensions in place.

‘Fight for justice’

Kinnock said: “The fight for justice for these men and their families does not begin and end with Active Wealth. It spreads far and wide, and deeply.

“Other advisers and other professional organisations, such as investment companies and self-invested personal pension providers, must no longer be able to look the other way and adopt a ‘see no evil’, ‘ask no questions, tell no lies’ approach, as long as the money continues to roll in.”

He added: “There are very real concerns that hundreds of steelworkers were deceived by some rogue advisers who preyed on unjustified fears about the Pension Protection Fund or the solvency of the replacement BSPS.”

The MP said it was “clear” unscrupulous advisers exploited steelworker concerns around the BSPS and failed to correct misconceptions and fears about BSPS 2 – the option steelworkers were given to transfer into if they wanted to remain in a DB scheme.

For his part, Rush said he had always suspected Active Wealth UK was merely the “tip of the iceberg”.

“These men did not transfer out [of BSPS] because they were greedy and wanted to make a lot of money,” he continued. “They were terrified that they would lose everything they had worked for.

“In a vacuum of information created by trustees who simply were not able to react properly, panic ensued. This panic was capitalised upon by Active Wealth and, I fear, others who appear to have acted in the most appalling manner. They knew that financially illiterate clients simply did not know what they did not know.”

Hann added: “Where advisers failed to challenge the perception that the new scheme may fail, and instead preyed on fears that it would, then the decision to transfer has to be seen as unsafe. Where this might be the case, it is absolutely vital that the individual gets their advice checked as soon as possible.”