Pru rapped over pension mis-selling cases

Helen Liddell, Economic Secretary to the Treasury, said yesterday she was disappointed with the failure by Prudential, the UK's largest insurer, to include 8,000 people as top priority cases in the review of pension mis-selling.

Prudential failed to notice that 8,000 people had become urgent cases since the review started in October 1994.

Her comments came as the Treasury yesterday raised its estimate of the number of likely victims from 1.5 million to 2.1 million. Of those, 600,000 people have been identified who require urgent compensation.

The Treasury also named a further 17 companies who are nearly three years behind in compensating their victims, including Axa Equity & Law, Commercial Union, Friends Provident, Midland and Standard Life.

Mrs Liddell said: "No-one gets off the hook where mis-selling of personal pensions may have occurred. Every firm must get on with the urgent job of reviewing cases and provide redress where it is due."

The Minister's comments follow Prudential's near-doubling, to pounds 450m, of the amount it is setting aside to compensate its victims, including 60,724 urgent cases, each potentially costing pounds 7,500.

A spokesman blamed part of the extra cost on Chancellor Gordon Brown's decision to abolish tax credits on dividends, adding that the Pru had at least 300 people working on the review. He said the 8,000 extra cases came about because the mechanism for upgrading how many there were had gone wrong.

Prudential has made faster progress than many of the 41 companies named by the Treasury as falling behind on the urgent cases, completing its review of 23 per cent of the priority cases.