HISTORIC PRESS RELEASE : Patricia Hewitt hails pensions review progress [January 1999]

The press release issued by HM Treasury on 14 January 1999.

Over 350,000 people, who suffered a loss because of  personal pensions mis-selling, have now accepted offers of compensation. This telling response to the Government’s support for the priority pensions review was today reported by the Economic Secretary Patricia Hewitt.

Welcoming the latest figures for firms monitored by the Treasury, Ms Hewitt said:

“It is good news that I can today report significant progress in the review of priority cases. When we took office, more than two years after the review began, the firms with most cases had completed only 15%. The latest figures show them reaching 94%.

“Firms have now recognised that this Government is committed to seeing pensions mis-selling sorted out and the victims of mis-selling receiving the redress they are entitled to.”

Of the 21 firms whose results are published today:

• one has still to resolve 75 per cent of its cases; and
• 17 firms have now resolved over 90 per cent of their cases.

The time limit for completion of the priority review, set by the Personal Investment Authority (PIA), has now expired for 19 more firms. By 31 December 1998 all firms should have completed their priority reviews. Consistent with the treatment of the 20 firms already removed from the Treasury’s monthly list, the Minister said that the others will be removed if, in the PIA’s assessment, they have met their targets.

The Minister warned firms that she would be closely monitoring progress in phase 2 of the review.  She added:

“Firms have eventually learned the lessons of phase 1 of the review. I expect the whole industry to carry forward recent progress into phase 2. The Government and the  regulators will no longer tolerate delay. Firms must adhere to the regulators’ timetable for completion of  phase 2. Only then will customers be able to regain confidence in the financial services industry.”

As the regulators’ advertising campaign for phase 2 of the pension review gets underway, Ms Hewitt encouraged younger people to take the opportunity of finding out whether they might be due redress for mis-selling.

Up to 1.8 million people may need to have their cases reviewed in phase 2. FSA has instructed firms to write to all customers who might have been mis-sold a pension by the end of April. The Minister urged anyone who receives a letter from their pension firm to read it carefully and complete the form. She said:

“Consumers have their part to play in the review. If you receive a mailing from your firm with ‘R U Owed?’ on the envelope, read it carefully. If you think you are affected, send the requested information back to the firm.

“Investors who were badly advised and lost out as a result could be owed as much as 4,000 Pounds or more. That is worth the time to sit down and work out whether your case should be reviewed. As the adverts say – ‘Mis-sold a pension? – They O U’.”