Nick Smith MP Labour MP for Blaenau Gwent
Nick Smith MP has said that thousands of steelworkers across South Wales have been “let down by the system” on the eve of their pension decision deadline.
The Blaenau Gwent MP has been campaigning for 130,000 former and current steelworkers to receive the necessary advice and support as they decide on the future of their British Steel pension.
Tomorrow (Friday, December 22) is the last day for 130,000 current and former steelworkers to decide the future of their British Steel Pensions.
As of last week, 30,000 still hadn’t made a decision between the Pension Protection Fund and the new British Steel Pension Scheme.
The process has been dogged by reports of a “feeding frenzy” at places such as the Port Talbot Tata Steel plant, as some advisors look to take advantage of steelworkers’ decision making.
There have been reports of steelworkers advised on alternative investments but then being slapped with sky-high exit fees when they change their mind.
Despite Mr Smith calling for a Government statement on the issue last month, the Treasury had failed to respond sufficiently forcing him to make a Point of Order in Parliament calling for action.
In addition, the Financial Conduct Authority have assessed 17 firms involved in providing advice to steelworkers and agreed with six of them to stop providing advice on pension transfers.
Speaking in the last few hours before the deadline, Mr Smith said steelworkers had been insufficiently supported in the process as they tried to make one of the most important decisions of their lives.
“I am bitterly disappointed that it has taken this long for an official Government response to a problem months in the making”, he said.
“The Work and Pensions Select Committee heard last week that hundreds of the 2,200 people who have taken these transfers could have received bad advice.
“It has taken far, far too long for regulators to even begin to step in and there is still a lack of information out there.
“Why can’t someone like the FCA help people find reputable advisors in their area very easily? Why are the rulings on these companies being investigated so opaque?
“There is a long-term pensions problem brewing if more is not done, and these steelworkers deserved better.”
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 2,200 members then transferring their benefits.