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£13.5bn bill for pension misselling

The final bill for the pension review has been calculated at £13.5bn, with 98 per cent of cases completed on time, according to the FSA.
IFA firms have the most cases still outstanding, with only 77 per cent of cases completed compared with 99 per cent from product providers and bancassurers.
Of the total bill, £11.5bn has been paid out to consumers in compensation but admin costs have amounted to £2bn. City law firm Reynolds Porter Chamberlain says this works out at nearly 20p for every£1 in compensation.
RPC partner Jonathan Davies points out that, for mutual life offices, the review costs have fallen entirely on the shoulders of members, meaning that one group has effectively compensated another.
As of last week, the FSA estimates that 1.6 million cases have been reviewed and 90 per cent of redress paid out. Outstanding cases are due to be completed by the end of the year and the FSA says it is monitoring those dragging their feet and is prepared to take action if necessary.
It has so far taken disciplinary action against 346 firms, resulting in fines of £9.6m.
The FSA says the target of 90 per cent of FSAVC cases to be reviewed by the end of June was met, with £300m paid out in redress. The remainder of cases are due to be finished by the end of the year.
Spokeswoman Louise Buckley says: “The general feeling is that most firms will have completed any outstanding cases by September but, for any of those that have not, we will take whatever action is necessary.”

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