Nick Smith MP has called on the Financial Conduct Authority to help steelworkers who “don’t know where to turn” as their vital pension deadline looms.
The deadline for 130,000 current and former steelworkers to decide where their pension pot will be moved has now been extended to December 22.
But there are still concerns of a “feeding frenzy” as fears grow of some financial advisers offering bad advice in a bid to profit from people’s confusion.
The Blaenau Gwent MP, whose call in the Budget debates for support from the Government was followed by the announcement of a dedicated helpline, has written to the FCA asking for an independent panel to support constituents.
It follows news last week that the FCA reached a voluntary agreement with one financial advice company, Active Wealth, for them to stop taking on new pension business.
However, Mr Smith has received reports that steelworkers dealing with Active Wealth have been told by the FCA to ask that company for a recommended alternative – instead of just being provided alternatives from the FCA.
Speaking after a meeting with the Economic Secretary in a bid to secure more support for steelworkers, Mr Smith said agencies couldn’t sit on their hands when so many futures were at stake.
“I’m pleased that the extension has happened and I’m pleased about the helpline. These are important steps as steelworkers in Blaenau Gwent wrestle with this important decision”, he said.
“But organisations such as the FCA shouldn’t keep this issue at arms length. Constituents need the best guidance – a system that works for them.
“We’re already getting a trickle of stories of people losing chunks of their money. If this becomes a deluge a decade down the line, then the people who helped build this country will have been abandoned when they needed our help the most.”
As part of the restructuring deal cut in August to help keep the steelmaker Tata afloat, members of the £15bn British Steel pension fund have been given the option to shift their pensions to the Pension Protection Fund or a new retirement scheme backed by Tata.
But for those members who have yet to claim their pension, they are also able to transfer their pensions into personal investments.
Since April, the British Steel pension fund trustees have been asked for around 11,000 quotes for pension transfers, with an estimated 1,700 members then transferring their benefits.