Banks offer olive branch on pensions

NIC CICUTTI

Britain's biggest banks offered an olive branch to thousands of pension transfer victims by announcing they would waive a six-year rule barring their clients from seeking compensation through the courts.

The banks said they would not oppose legal claims lodged after six years if their clients agreed to their cases being assessed first by the industry's review procedure.

The decision was jointly agreed by Abbey National, Barclays, Midland, National Westminster, Royal Bank of Scotland and Lloyds TSB.

The banks hope the move will reduce a flood of claims by tens of thousands of clients who bought personal pensions during the sales boom in 1989/90.

Fears were raised that if they did not sue within the six-year time limit, they might be barred from doing so by the Limitation Act of 1980.

Tim Sweeney, director general of the British Bankers Association, which brokered the deal, said: "While problems have occurred in getting [the review programme] started, now that the regulators have made substantial progress towards settling the specifications [it] is well under way."

Andrew Large, chairman of the SIB, said yesterday: "I am very pleased. Investors should be able to participate in the review without worrying whether their legal rights are being prejudiced."

The banks' decision places the spotlight firmly on insurance companies, which carried out the vast bulk of pension transfers. Joe Palmer, chairman of the Personal Investment Authority, the financial watchdog, said: "[We] strongly encourage other firms to ... offer the same reassurance."

However, a spokeswoman for the Association of British Insurers said: "We won't be issuing a statement. But we are encouraging our members to reassure clients that they will not be using the limitation period."