The original scandal, firmly identified by the City's powers-that-be more than a year ago, was that people were kissing goodbye to generous employers' schemes for riskier and worse value personal pension plans. But last week, the chief financial services watchdog, the Securities and Investments Board, admitted that deadlines for reviewing and compensating the most urgent cases had been missed.
The retired and the estates of the dead should have had their money by the end of last year. In fact, very few people have been paid. Hopefully they will by the end of this year, but don't hold your breath. As the Consumers' Association put it last week, the watchdog has missed its own deadline.
People's natural apathy clearly hasn't helped - only just over half the affected individuals have replied to letters sent out by pension companies, as we report in the other article on this page. Individuals must act if they want redress.
But the watchdogs and companies aren't going to pass the buck that easily. In the first place, it was the watchdogs - the SIB and others - who left the reviewing of possible cases of mis-selling to the pension companies. Those companies have obviously worked night and day - well, sent a couple of letters - to compensate their victims. Contrast the companies' apparent inability to contact all those required with their legendary ability to find people to sell policies to in the first place.
Furthermore, one group - independent financial advisers - have in many cases in effect boycotted the reviews for fear of invalidating their professional indemnity insurance.
I could say that the real scandal of these continuing delays is that people who should be saving for retirement will continue to shy away from making provision because they distrust these companies.
But something positive could still come out of all this mess. The devastating loss of trust creates the opportunity for acceptance of a new and radical "big idea" on pensions. For example, the Labour party leadership says it is considering forcing people to save for retirement, perhaps through some sort of state savings institution. Or on a voluntary level, a new provider such as Richard Branson could step in with a low-cost and straightforward pension plan. Or both.
NO windfalls this week, but as I report on page 3 the Government is planning moves that would reduce confusion over which building society accounts to open for the best chance of payouts. All mainstream accounts offered by building societies to new savers would have to carry membership status - the key to qualifying for windfalls. But don't get too excited. The change is unlikely to come in until next year, or be retrospective. In the meantime, societies are doing their best to keep speculators out. The Alliance & Leicester closed all its membership accounts to new savers last week (for which read countdown to announcement), while the Britannia closed its instant access membership account.
WITH building society windfall fever rampant, societies hardly need an excuse to cut saving rates yet further. But the Chancellor's 0.25 per cent cut in the base rate last week means the shrinkage is set to continue. The Nationwide was the first of the big names to go - it cut rates by an average of 0.45 per cent with effect from today - although it claims that this move reflects its not cutting rates along with other societies earlier. But expect other societies to follow shortly, if not on shop- window tax-free Tessa accounts.Reuse content