Pension misselling costs rise

The latest estimate of pension misselling costs and compensation now stands at £13.5bn, following revised guidance from the Financial Services Authority (FSA) on adjustments for pension transfers and resolution of phase 2 (younger customers) cases. The latter compensation is now expected to reach £7.5bn rather than the March 1998 estimate of £4bn to £5bn. Phase 1 (older customers) compensation remains at £4bn but administrative costs have risen to £2bn.