FSA on track to bring the pensions mis-selling review to a close

By then, the vast majority of consumers with outstanding claims will have had an offer made and should expect to receive their compensation by December 2002.

New figures released today show that 84% of Phase 2 cases have already been completed. Offers have made to over one million consumers amounting to nearly 9 billion. Fuller details of the FSAs planned approach to conclude the review will be announced in its Plan and Budget 2002/03 due to be published on 31 January 2002.

Philip Robinson, FSAs Director of the Pensions Review, said:

"Getting redress for past pensions mis-selling has been a priority project for the FSA since its formation. We are pleased that the great majority of consumers mis-sold pensions have now been compensated, and expect the rest to follow soon. Unfortunately there remain a small number of firms who are stopping this sorry episode being finally closed.

Between now and the June deadline the FSA will concentrate its efforts on those firms and enforcement action will be used where necessary. Recent figures show, for example, that there are some small IFA firms that remain unwilling to take responsibility for redressing losses caused by their past mis-selling."

Since the beginning of the pensions review, the FSA has taken disciplinary action against 345 firms, resulting in fines totalling 9,507,250.

Outstanding cases

Whilst we expect that the pension review will have been largely completed by the target dates set by the FSA there will remain a minority of cases outstanding. These will include cases where the firm is no longer in place to pay compensation. In such cases the FSA will to carry out the loss assessment itself and any compensation due will be paid by the Financial Services Compensation Scheme.

The FSA has already dealt with 47,000 of these cases (including 91% of its original phase 2 caseload). The final caseload continues to increase, so at present the FSA has a further 25,000 cases to process, with more anticipated.

Notes for editors

1. The personal pensions mis-selling review is aimed at people wrongly sold personal pensions between 29 April 1988 and 30 June 1994. Mis-selling occurred when people who would have been financially better off at retirement in their employers pension scheme were advised to leave or not join their employers pension scheme (opt-out and non-joiner cases), or where they transferred pension benefits from a previous employers scheme and out a personal pension plan instead. The priority phase of the review of mis-sold pensions involved older consumers at or near retirement. Phase 2 extends the review to younger consumers, typically in their 30s and 40s.

2. Details of progress of phase 2 of the Pensions Review (based on December 2001 returns) :

   	Total	Product Providers and Bancassurers	Networks and Large IFAs	Small IFAs
   Requests for Review	1,248,631	1,085,856	103,185	59,590
   Cases for Review (a)	833,124	743,159	53,466	36,499
   Assessments complete (offers made plus cases where no redress due)	699,455	629,594	47,690	22,171
   As a % of (a)	83.96%	84.72%	89.2%	60.74%
   Offers made	567,556	518,810	39,075	9,671
   Offers accepted	513,592	467,080	37,623	8,889
   Amount of redress Accepted	4,431 million	3,934 million	406 million	90.7million

3. In Phase 1 of the review 421,000 investors have been offered redress. Redress offered and accepted (excluding the value of unconditional offers of reinstatement and benefit guarantees) amounts to just under 4 billion.

4. The FSA is to formally consult with firms on the payment of windfall augmentation cases. Where cases are suspended at loss assessment stage because it is affected by a windfall augmentation, firms must keep a record of the reasons. FSA intends to include proposals an appropriate target date for completion of these cases.

5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.

6. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.