Latest mis-selling scandal ends with £250m in compensation for over 80,000 people

The Financial Services Authority (FSA), the government-appointed watchdog, has ordered insurance companies and other financial institutions to pay out £250 million in compensation to people mis-sold free-standing additional voluntary contributions (FSAVCs).

The FSA launched a review of FSAVC policies in February 2000 when evidence began emerging that some people had been wrongly advised to put their money into an FSAVC rather than sticking with the additional voluntary contribution scheme linked to their occupational pension scheme.

Almost 100,000 people have had their FSAVC policies investigated and over 85% of these will receive a total of £250 million in compensation, of which nearly £240 million has been paid already.

John Tiner, managing director at the FSA, said: "We have ensured that firms have completed the review on time and we are determined that the new regime will make occurrences like this much less likely."