Between April 2015 and September 2018, more than 235,000 final salary style pension scheme members from various industries received transfer advice from financial advisers who were incentivised by commissions and high fees, according to the Financial Conduct Authority.
Around 69 percent of these people were advised to transfer but in 2018, the FCA found only 48 percent of the recommendations were suitable.
The FCA is advising people to seek compensation.
Now, Labour MP Nick Smith has urged the National Audit Office to “investigate” how it was handled.
Mr Smith said: “Our experience of the FCA in relation to the scandal has been one of delay and failure to lead.
“It is estimated that thousands of steelworkers were given bad transfer advice and lost tens of thousands of pounds as a result.
“The National Audit Office needs to investigate how this has been handled.”
Anger has risen among south Wales steelworkers at how they were persuaded to transfer out of their defined benefit pension.
David Neilly, a former member of the British Steel Pension Scheme, added to the Financial Times: “The cowboy advisers are laughing in their villas while we are having sleepless nights.
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Steelworkers who attended an FCA event in Swansea said they did not know whether the advice they got was right or not.
One said: “I haven’t got a clue what today is about.
“I just followed my mates who were getting transfer advice.”
Another said: “I’ve known my adviser for 20 years and he’s done all my mortgages and did my transfer.
“I don’t know whether the advice I got was right or not.”
Others said those who gave them bad advice are still trading.
One said: “The guy who gave me the bad advice is still trading.
“He’s driving around town in a [luxury car].”
The FSCS has so far settled 482 claims totalling around £21m for BSPS members, with an average payout of around £43,000.
Another 153 claims are being processed.
The National Audit Office, the spending watchdog, said it was “at the preliminary stages of considering a potential study into the regulation of financial services with a focus on consumer protection”.
“Our comptroller and auditor general has not yet decided whether we will go ahead,” it added.