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UK watchdogs wary P&O pension scheme will be British Steel 2.0

They are urging anyone who was made redundant to seek financial advice

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The mass firing of nearly 800 employees of British ferry and cruise company P&O caused indignation in every corner of the UK for the way it was carried out, leaving workers jobless in a matter of minutes.

But the UK financial regulators and bodies are at work to avoid making P&O another British Steel pension scandal.

On 12 April 2022, the Financial Conduct Authority (FCA), The Pensions Regulator (TPR) and the Money and Pensions Service (Maps) raised concerns over the “heightened risk of pension transfers following recent redundancies”.

The FCA and TPR have warned those who lost their jobs that transferring out of their defined benefit (DB) pension is unlikely to be in their best interest.

Instead, they are urging them to seek guidance from Maps’ MoneyHelper and to turn to regulated financial advisers by checking their authorisation status on the FCA register to avoid scammers.

Conversations

The FCA is currently repeating its guidance to advisory firms that have permissions to advise on pension transfers, while TPR is in discussions with the trustees of the P&O pension schemes to protect savers.

The trustees have been asked to send a joint letter from the FCA, TPR and Maps warning members of the risks of transferring “to any savers who ask for a cash equivalent transfer value”.

The warnings from the regulators is aimed at stopping what happened in 2017 with the British Steel Pension Scheme with mass DB transfers being made, and the advice being given resulting unsuitable in most cases.

It took some time for the watchdogs to intervene in the British Steel scandal and when they did it was too late.

This time around they are moving quickly and early – considering that people were made redundant just a couple of weeks ago – to avoid history repeating itself and leave thousands of people out of pocket in retirement.

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