![[ image: width=150]](/olmedia/60000/images/_64859_Davies150.jpg)
![image: [ The Financial Services Authority and the Personal Investment Authority ordered the pensions review ]](/olmedia/60000/images/_64859_PSI.jpg)
Companies have been ordered to review the cases of younger investors by financial watchdogs investigating the mis-selling of pensions.
The review will cover:
The review will form the second phase of the investigation into the mis-selling of pensions launched by the Financial Services Authority (FSA) and the Personal Investment Authority (PIA).
The Chairman of the FSA, Howard Davies, said the review will focus on people who were sold personal pensions when they would have been better off remaining in, or joining a company scheme.
He said: "These are the younger investors who were either tempted out of occupational pension schemes or persuaded not to join occupational schemes when they could have joined, and persuaded instead take out personal pensions which we can now see were not as good a deal as far as they were concerned.
"The pensions were mainly sold by life insurance companies. We believe they did not properly advise the investors to whom they sold these policies. If they had properly advised those investors then they would have been advised to stay with their occupational pension schemes."
Mr Davies said compensation - which could total between £3.3bn and £5.8bn - will be paid by the companies who first sold the pensions. He said he hoped that this would happen by spring next year.
"At the moment the companies are completing work on the priority cases - those are people who have retired or are about to retire," said Mr Davies.
"We're saying that when they've finished the first 400,000 cases there's another 1.8 million for them to be getting on with. We want them all to be identified and for the paperwork to be done to give them the basis to asses the cost and make a payment by March 31 next year."
The FSA and PIA intend to monitor the way in which companies conduct the review.
Mr Davies said: "This money can be found and should be found. People are owed this money and they should receive it."
Industry shake-up
The scandal of private pensions being sold on bad advice erupted in the late 1980s.
The FSA and the PIA launched their review three years ago when 500,000 priority cases were put under investigation.
What has already amounted to a £4bn bill for bad advice looks set to rise to as much as £9bn.
Despite the announcement of a further review, the financial watchdogs expressed confidence in the pensions industry.
Mr Davies said he believed people starting a pension today should receive the right product for their needs. He said the system is tighter now, and should prevent most mis-selling in future.
Pensions scandal bill to top £9bn
(12 Mar 98 | Business)
Pensions Act 1995
Pensions Compensation Review Board Regulations 1997
HM Treasury
Occupational Pensions Regulatory Authority
The BBC is not responsible for the content of external internet sites.
Call for end to automatic life sentence for murder
Cardiff wins assembly battle
Prescott's son cleared of 'impropriety'
Fears over release of paedophiles
We're ready to rejoin talks, Adams tells US
Teenage attacker sent to mental hospital
Lord Bingham's speech in full
Two boys die in disused factory fire
Don't ignore violence, unionists tell Blair
Hunting Bill looks doomed
BSE herds 'needlessly infected'
BSE crisis cost UK £1bn in first year
(From Business)
Science still a man's world says study
(From Sci/Tech)
Dolly fleeced for fashion
Derbyshire sinking inquiry reopens
Pensions scandal bill to top £9bn
(From Business)
Bar owner accuses republicans
Two more charged with Poyntzpass murders
Princess Margaret leaves hospital
Closer co-operation for 21st century armed forces
Teenage pregnancies soar
Al-Fayed sees Diana inquiry judge
British find coffee is their cup of tea
Mother begs missing police girl to return