Pensions review update

Phase two of the pension review, which focuses on mis-selling to younger people, will cost around UK£7.5 billion in compensation according to latest FSA estimates. The forecast for redress for the priority cases remains unchanged at UK£4 billion. Administration costs are expected to total UK£2 billion. Firms are due to complete their reviews of phase two cases by 30 June 2002 when consumers should have received either a compensation offer or an explanation of why they are not entitled to redress. By September there were 1,194,978 phase two review requests and 871,986 were found to have a valid case. 301,093 assessments (35 per cent) have been completed. Of these 243,680 (80 per cent) have been offered redress with an acceptance rate of 82 per cent. The sum paid out is UK£1.7 billion. 717,000 investors were identified in the priority phase of the review. 98 per cent have had their cases assessed and 406,000 have accepted nearly UK£3.6 billion in redress.