Hartlepool MP says steel worker pension advice mis-selling was 'unacceptable'

The Work and Pensions Committee said it had received worrying evidence about financial advice provided to members of the British Steel Pension Scheme (BSPS).

BSPS members had, over the past year, "been exploited for cynical personal gain by dubious financial advisers in tandem with parasitical so-called 'introducers'", it said.

Steelworkers yet to reach pension age were encouraged to transfer their defined benefit pension rights into a defined contribution pension, known as making a DB transfer.

DB transfers may offer people readier access to cash and can be in the interests of people with a low life expectancy.

But transferring away from a DB pension or a "final salary" scheme is not usually in someone's interests, the committee said - as it means giving up generous and stable benefits in favour of a riskier investment.

Town MP Mike Hill has hit out at the effect it might have had on workers at Tata Steel's Hartlepool pipe mill.

"In 2016 the Workers, including over 500 employed by Tata Steel at the Pipe Mills in Hartlepool, had their backs against the wall," said Mr Hill.

"The Company was up for sale and they were told that jobs were on the line if something wasn’t done about the £15 billion pension scheme, which was seen as a blockage to merger or acquisition.

"Alternative, although less favourable, pension scheme options were thrashed out with the unions and the workforce voted overwhelmingly in February 2017 in favour of protecting jobs and bring to an end almost a year of uncertainty for thousands of workers who faced losing their employment when Tata was put on the market.

"Sadly the lack of clear information following the vote led to confusion and mistrust leading to people making life changing choices in a hurry and walking straight into the hands of shameless profit driven financial advisers.

"Workers and former workers have in many cases suffered significant loss of pension entitlement, often in the region of tens of thousands of pounds.

"This is completely unacceptable.

"Tata Steel still employs around 270 people at the 20 inch Pipe Mill in Hartlepool all of whom voted to keep the business afloat in 2017, but none of whom voted to be personally ripped off in this way.

"Serious lessons need to be learnt from this fiasco and the sooner the better."