Pension sharks target steelworkers at factory gates

Rogue advisers travel 350 miles to dupe employees out of thousands of pounds

ROGUE financial advisers have been making 700-mile round trips to lure steelworkers into transferring their pension funds at the factory gates.

Pension sharks have been enticing workers in Port Talbot ( pictured) with ‘chicken in a basket’ suppers in the hope of getting a slice of their nest eggs.

So dire is the situation that the City watchdog has even sent staff to the town to monitor the behaviour of salesmen.

The steelworkers have been targeted following changes to the British Steel Pension Scheme that were made to save their jobs.

Port Talbot- owner Tata Steel inherited the scheme and needed to separate it from the company to help it survive.

The scheme is now going into the Pension Protection Fund. Workers can choose between sticking with it – which would see them lose some retirement benefits – going into a new plan set up by Tata Steel, or joining a private scheme. With up to 200,000 workers making a decision, huge fees and pension pots are up for grabs. Benefits are typically worth between £300,000 and £500,000.

In evidence submitted to a parliamentary inquiry, experts told how financial advisers have descended on the South Wales town to target workers with retirement savings in the British Steel Pension Scheme.

Paperwork submitted to MPs lays bare how some steelworkers could lose thousands of pounds in fees by transferring their pots.

It describes how ruthless salesmen have descended on the town – with some making the journey from Newcastle, around 340 miles away.

Concern is mounting amid reports of rogue financial advisers offering bad advice for their own gain, charging high fees or guaranteeing returns of 26pc a year. One firm is said to have persuaded as many as 60 workers to give up the benefits of their pension and transfer to a new scheme.

Another firm which targeted steelworkers through a Facebook group has now been stopped from accepting new pension clients.

Former steel worker Stefan Zaitschenko said: ‘It’s causing a huge amount of worry. It’s throwing everyone in doubt.’

Financial adviser Al Rush, from Echelon Wealthcare, a firm which is trying help steelworkers, has been visiting the area. In evidence to the parliamentary inquiry, he wrote: ‘We heard stories of people being charged up to £20,000.

‘Since then, I have heard of one man being charged a fee of 4pc of his £650,000 pot – £26,000. A man told me he had been to a “chicken and chips in a basket” sales seminar where the audience was told that the FCA “thought that an upfront fee of 2pc was fair.” ’

Active Wealth UK had been advertising on Facebook to British Steel workers. It has been stopped from accepting new clients by the financial regulator, the Financial Conduct Authority, and must refrain from advising existing clients unless it has been signed off by a third party.

It is believed that several steelworkers are now looking at trying to freeze agreements with some companies, creating further havoc.

In his evidence to the upcoming parliamentary committee, Rush added: ‘The unruly and disorderly way that the BSPS members have had to make one-off life-changing decisions has been far short of acceptable. This pension action was on the cards two years ago, but nothing was done to properly prepare them for the transition.’

As of mid-November, around 1,700 members of the scheme had transferred benefits while 11,000 had asked how much they would be paid if they moved their pot to a new provider.

An FCA spokesman confirmed it was aware of reports that some had been providing ‘unsuitable advice’ on transferring schemes.

Active Wealth did not return the Mail’s calls.