LONDON (Reuters) – Firms advising folks on transferring pension schemes will have to pay the next levy to Britain’s statutory compensation physique to assist meet claims from steelworkers.
The Financial Services Compensation Scheme (FSCS) stated it’s going to levy monetary companies 407 million kilos general within the monetary yr that started final month, up 71 million kilos on the prior interval.
The FSCS pays compensation if a agency is unable to pay claims in opposition to it.
The element levied on life and pensions advisers has been elevated by 52 million kilos, primarily because of the rise in outlined profit pension switch claims, the FSCS stated in a press release on its remaining levy on Tuesday.
This consists of 10 million kilos to pay claims in opposition to various impartial monetary advisers, together with Active Wealth, which suggested staff at former British Steel crops to switch their outlined profit pension into one other scheme.
Britain’s Financial Conduct Authority was closely criticised by lawmakers in February for being too sluggish to forestall “vulture” monetary advisers from ripping off steelworkers confronted with vital choices over their 14 billion pound pension pot.
Britain has additionally launched pension “freedoms” which permit folks to money of their pension pots.
The FSCS stated there will likely be the next levy to pay claims in opposition to operators of Self-Invested Personal Pensions or SIPPs.
The elevated price range may even assist pay for claims anticipated in opposition to Beaufort Securities, an bancrupt UK dealer, the FSCS stated.
“The levies announced today provide for the steady increase in claims and compensation costs related to retirement saving,” stated Mark Neale, chief government of the FSCS.
“Many claims reflect bad advice to transfer pension savings from occupational schemes into Self-Invested Personal Pensions, usually with a view to invest in illiquid and risky unregulated products,” Neale stated.
Reporting by Huw Jones, enhancing by Louise Heavens