More than £40million of steelworkers’ cash was shunted out of the British Steel pension fund into risky investments by a rogue adviser, it has been revealed.
Documents published yesterday showed that Active Wealth, a West Midlands-based financial adviser, transferred more than 100 staff out of their gold-plated pensions into riskier investment funds.
Active Wealth has now been banned from taking on new pension business.
On average, each steelworker transferred nearly £400,000 into private pensions while the biggest transfer was for more than £790,000, according to papers filed with the Work and Pensions Committee of MPs.
More than 130,000 British Steel Pension members were given until December 22 to decide what they wanted to do with their savings before the scheme, which was struggling to cover payouts to retirees, was transferred to the official Government-run ‘lifeboat’ scheme.
Younger members were given the option of transferring their money into a private pension – which saw financial advisers flock to the factory gates in Port Talbot.
It is thought in total more than 2,000 steelworkers applied to transfer into stock market-linked investments that experts regard as too risky for retirement savings.
Each worker was charged more than £1,500 for the advice.
City watchdog the Financial Conduct Authority threatened action against the financial advisers but last night Frank Field MP, chairman of the Work and Pensions Committee, warned that the FCA may not have done enough to protect the workers.
He said: ‘They must take care they are not sleepwalking into yet another huge mis-selling scandal.’