Liddell details pensions mis-selling sanctions

Helen Liddell, Economic Secretary to the Treasury, said yesterday that failure by pension providers to clear up the mis-selling scandal would affect their ability to sell in two potentially vast new markets - stakeholder pensions and individual savings accounts. Andrew Verity reports.

In a statement to the House of Commons, Mrs Liddell said the records of investment firms in compensating investors for mis-selling will be taken into account when they apply to sell the new financial products to be launched by the Government.

She said: "We anticipate that future decisions on the regulatory approval of stakeholder pensions would take into account the conduct and corporate governance of those involved. This would include, of course, their record in settling cases of mis-sold pensions.

"The Government believes that the time has come for a whole range of sanctions to come into play. The only way for a firm or an individual to avoid disciplinary action is to avoid the conduct which warrants it."

The Government also confirmed yesterday that directors could be removed from boardroom posts for failure to meet deadlines for clearing up the mis-selling scandal. More than 90 per cent of the top priority cases must be completed by the end of December.

Errant directors could also be barred from working within the financial services industry. The same will apply to the managers and sales staff of life insurers and independent financial advisers.

"Far too many firms - from big insurance companies to small independent financial advisers - have been slow to act. Some firms have hardly started. They have not yet grasped the severity of the situation," Mrs Liddell said.

While the Government has hinted in the past that poor conduct of the review of mis-sold pensions would affect the ability to sell the new products, Mrs Liddell's statement is the first explicit warning.

Stakeholder pensions are at the heart of the Government's much-touted pension reforms, aimed at giving people on lower incomes better access to pension provision. They will be designed as collective investments and marketed through trade unions, professional bodies and other affinity groups.

Given that 8 million people have no retirement provision except state pensions, the market is potentially huge.

In order to compete with other pension products, the new pensions would have to enjoy tax breaks.

Mrs Liddell has also given her first formal warning that mistakes in the mis-selling review will affect decisions on which companies will sell individual savings accounts, the new tax-privileged vehicle set for launch in April 1999.

The Personal Investment Authority, the regulator which monitors the review of pension mis-selling, yesterday said Barclays Life and United Assurance had completed the first tranche of urgent cases on time.

The firms were required to complete reviews of 90 per cent of top priority cases by 31 October, an earlier deadline than many other firms.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before