‘You’re asking someone to write off a year’s wages with a phone call,’ said one steelworker of the tough decision to accept a 5% exit charge to withdraw his pension pot from funds he transferred into via collapsed IFA Active Wealth (UK).
The British Steel Pension Scheme saga has been one of the biggest stories over the last 12 months, but rarely have we heard directly from those who were personally impacted.
Steelworkers who had spent over three decades working shifts at the flagship British Steel site in Port Talbot were angry with the way their pensions had been handled by new ownership Tata Steel.
In November last year, as steelworkers faced a looming deadline to decide whether to move into the new British Steel Pension Scheme (BSPS2), the Payment Protection Fund (PPF), or transferring out, we began reporting that steelworkers were being visited by various financial advice firms to discuss the third option in particular.
Ten financial advice firms have since suspended their pension transfer permissions, amid fears from the Financial Conduct Authority (FCA) over the suitability of advice given to steelworkers to transfer their pots away from the safeguarded BSPS2 and PPF options.
Over 40 steelworkers who transferred out via Active Wealth (UK) have now joined a group legal action.
Philippa Hann, partner at Clarke Wilmott, who is handling the legal action, said: ‘This is why it is important for advisers to provide unbiased information to those seeking advice on pension transfers and to not trigger behavioural biases to encourage clients to transfer when it is not in their best interests.’
New Model Adviser® sat down with two steelworkers in Margam, just outside Port Talbot, to get their accounts of how the biggest pension scandal in recent history affected their lives.
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