British Steel Pension Scheme: Transfers Debate
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Nick Thomas-Symonds
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British Steel Pension Scheme: Transfers
Nick Thomas-Symonds Excerpts(5 years, 7 months ago)
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Nick Smith (Blaenau Gwent) (Lab)
I beg to move,
That this House has considered pension transfers and the British Steel pension scheme.
For many of us, pensions are a distant, complex and opaque topic. Everyone hopes that their pension will provide financial security for their family’s future. It is often the single biggest pot of money that anyone will have, but that makes pension pots ideal targets for mis-selling. Unfortunately, in recent years pensions mis-selling has got worse. Since further pension freedoms were brought in four years ago, it is easier to transfer out of defined-benefit pension schemes. More than 200,000 people have done that, but as transfers have increased, so have the problems. The compensation paid out for poor transfer advice increased to £40 million last year.
I called for this debate because of a specific mis-selling crisis that affected hundreds and potentially thousands of people across south Wales in particular. Two years ago, the British Steel pension scheme began to restructure its fund after a difficult period for the industry. Scheme members had a hard deadline to make a critical decision: they could go into a new scheme, be defaulted into a lifeboat fund or transfer out. They had to decide against a backdrop of serious uncertainty about the scheme and the industry. The scheme’s administrators were under enormous pressure, with 4,000 calls a day. Vital information about pension advisers from the Financial Conduct Authority was often highly technical. All that helped to create a perfect storm.
Nick Thomas-Symonds (Torfaen) (Lab)
I congratulate my hon. Friend on securing the debate and commend the work that he is doing in this area. He has mentioned the Financial Conduct Authority. Does he agree that one issue here is regulation and that too often those who suffer a loss are pushed in the direction of a civil remedy when actually we need stronger enforcement and tougher criminal sanctions?
Nick Smith
I agree. I think that the FCA has the right teeth but is not using them and that the police need to intervene much earlier.