Compensating people who were mis-sold pensions could cost more than £9bn - more than twice the original estimate.

The Director General of the Association of British Insurers, Mark Boleat, talking on BBC Radio 4's Today programme (1'21")

The revised estimate came as companies involved in mis-selling pensions were ordered to review another 1.8 million cases.

Three years ago an investigation was launched into the 500,000 most urgent mis-selling cases which has already cost more than £4bn in compensation.

Financial watchdogs say the extended review will focus on younger investors who are still more than 15 years away from retirement.

The Financial Services Authority and the Personal Investment Authority are to launch the second phase of their pensions review, aimed at people wrongly sold personal pensions when they would have been better off remaining in, or joining, a company scheme.

The review has so far concentrated on "priority cases" involving people who had retired, were close to retirement, or had died.

The FSA and PIA said the second phase of the investigation would look at cases involving younger investors who were still 15 years or more away from retirement.

An estimated 1.8 million investors fall into this category, and between them they face losses totalling £6.6bn.

Compensating them could cost between £3.3bn and £5.8bn, said the financial watchdogs.
 

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