‘FCA must act over shoddy pension advice’
BRITISH Steel workers are suffering from bad financial advice which can encourage them to quit their valuable final salary pension schemes in favour of worse arrangements, MPS have warned.
Advice is too often “shoddy or just plain crooked”, Frank Field, chairman of the influential Commons work and pensions select committee, said in a letter to the Financial Conduct Authority’s (FCA) top supervisor Megan Butler. He added that the FCA had been “extraordinarily cautious” by acting very slowly to protect savers. So far the FCA’S action to help British Steel Pension Scheme members “remains grossly inadequate”, Mr Field warned.
“It is apparent that insufficient protections are in place to prevent consumers with defined benefit pension pots being seduced into a transfer against their interests,” he said.
The FCA acknowledges that final salary scheme members will rarely benefit from transferring out of their pension, but professional services firm Mercer estimates 210,000 people did just that with £50bn of savings between April 2015 and June 2017.
The letter comes after warnings that rogue advisers are specifically targeting the more than 100,000 members of the British Steel pension scheme.
An FCA spokesman said: “The FCA has received the letter and will, of course, respond to it.”