Ps representing victims of pension mis-selling today accused the Financial Conduct Authority of being “not fit for purpose” over its failure to help consumers.
Nick Smith and Stephen Kinnock, MPs whose constituents saw their life savings damaged when rogue advisers persuaded them to transfer out of the British Steel Pension Scheme, declared the FCA was”characterised by organisational drift and bureaucratic inertia.”
In a letter to new FCA chief Nikhil Rathi, they wrote: “Despite our multiple and ongoing attempts to prompt action, the FCA continues to be City facing and lacks sufficient vision to tackle the issues facing consumers.”
They accused the FCA of presiding of “delay and inaction” in helping steelworkers impacted by the scandal, which took place three years ago.
Other defined benefit pension scandals are believed to have followed at other companies across the UK as companies restructure their schemes.
“Time is running out for the victims of this scandal, and it is now vital that the FCA use the full strength of its powers to take widespread action,” the letter says.
Steelworkers are thought to be owed as much as £375 million in compensation for their losses when commission-hungry advisers persuaded them to move their pensions savings to higher risk and more expensive schemes.
The letter describes these advisers as “pensions sharks” who gave bad advice.
The FCA has acknowledged that bad advice was given to many people over their defined benefit pension transfers, the MPs said restitution has been too slow, and not enough has been done to contact steelworkers who may not be aware they have been badly advised and to seek compensation and new pension arrangements urgently.
The MPs called for the FCA to launch a consumer redress scheme, as happened with the Arch Cru investment scandal in 2013. Under such a plan, all former members of the British Steel scheme would be written to by the FCA with the offer of a case review.
They also demanded more “boots on the ground” in the British Steel areas to engage properly with those affected and raise awareness that many may be suffering heavy financial losses and an impoverished retirement.