Urgent action needed over pensions scandal, say MPS
A major pensions mis-selling scandal is erupting according to MPS, who said British Steel Pension Scheme (BSPS) members had been “shamelessly bamboozled”.
The Work and Pensions Committee said it had received worrying evidence about financial advice provided to members of the BSPS.
Members had “been exploited for cynical personal gain by dubious financial advisers in tandem with parasitical so-called ‘introducers”, it said. Steelworkers yet to reach pension age were encouraged to transfer their defined benefit pension rights into a defined contribution pension, known as making a DB transfer.
DB transfers may offer readier access to cash and can be in the interests of people with a low life expectancy.
But transferring away from a DB pension or a “final salary” scheme is not usually in someone’s interests, the committee said – as it means giving up generous and stable benefits in favour of a riskier investment.