Steelworkers' pension scandal brewing, warns Labour MP

Image source, Christopher Furlong/Getty Images
Image caption, Members of the pension scheme have another few weeks to decide whether to transfer their savings

A "steelworkers' pension scandal" is brewing, a Welsh MP has warned in the House of Commons.

Blaenau Gwent Labour MP Nick Smith accused the Financial Conduct Authority (FCA) of providing insufficient support to steelworkers choosing where their savings should go when the British Steel Pension Scheme (BSPS) ends.

Experts have said some financial advisers are having a "feeding frenzy".

The FCA said it could not advise pension scheme members under its remit.

Mr Smith said: "I am afraid of a steelworkers' pension scandal brewing.

"Constituents of mine are worried about making the wrong decision for a pensions transfer.

"The Financial Conduct Authority [FCA] is, I think, providing insufficient support to steelworkers at this crucial time."

Mr Smith asked for a statement from a UK government minister and an action plan from the FCA "to support steelworkers trying to do the right thing for their families".

Commons leader Andrea Leadsom told him: "Pensions is of course a complex subject and for anybody who is trying to make decisions they do need the right advice for that.

"You are right to raise it in this chamber and I do encourage you to seek further guidance from the FCA so you can provide support to your own constituents."

Image caption, Nick Smith's constituency includes many retired steelworkers

There are about 130,000 current and former workers in the BSPS in the UK.

As it ends, they have the choice to transfer to a new scheme, which is less generous but still better for most people than a second option, the Pension Protection Fund.

But it is a third option, transferring out of the scheme completely, that is causing most concern.

A steel union has said it could take legal action if there is evidence its members have been mis-sold pensions by independent financial advisers.

Members of the pension scheme now have until 22 December to decide where to transfer their savings, after an earlier deadline was extended by 11 days.

An FCA spokeswoman said it was "unable to provide advice to members but is taking action in the areas that we are able to and will continue to do so".

The spokeswoman said the FCA had "quickly responded" when it learned of concerns about financial advisers "by visiting areas around British Steel sites to speak to advisers and make our expectations clear".

"Where we have had concerns about the advice being given by firms, we have prevented them from continuing to provide advice," she said.

The FCA said steelworkers needing help with their pension options should contact the Pensions Advisory Service, an organisation it had been liaising with.

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