Tata Steel is due to merge with Germany’s ThyssenKrupp in a deal that secured the future of Tata's Port Talbot works. 

But after the government’s Pension Protection Fund was called in to act, workers savings could be targeted. 

After years of uncertainty for Tata staff at plants in Llanwern, Caerphilly and Port Talbot, members of the British Steel Pension Scheme (BSPS) decided on Friday whether to stay with the scheme, join a new one with reduced benefits set up by Tata Steel, or transfer to a personal plan.

However, it has been claimed unscrupulous pension advisers taking been taking advantage of the situation, with the Financial Conduct Authority (FCA) recently banning six companies from providing advice to the steel workers.

The Government was told it must take action to stop thousands of steelworkers being transferred into a pension scheme that offers them fewer benefits, says Aberavon MP Stephen Kinnock.

The FCA regulator is known to be investigating a number of pension firms, but MPs are unanimous in claiming that the efforts to protect steelworkers was inadequate, and that the FCA should have acted sooner.

Mr Kinnock said: “The FCA has been asleep at the wheel.”

Indian-owned Tata Steel UK has offered to pay £550m into the now-closed pension scheme and give the fund a 33 per cent stake in its UK business, but it will no longer have any responsibility for the pension scheme.

In most cases, the new Tata-backed scheme offers better benefits to the 8,000 people are employed by the company across England and Wales, including 3,500 in Port Talbot. But that has not stopped less reputable firms from targeting the workers with alternative and derisory offers.

Blaenau Gwent MP Nick Smith has campaigned for steelworkers to be given more support as the benefits for the steelworkers remain unclear.

Mr Smith said: “The Work and Pensions Select Committee heard last week that hundreds of the 2,200 people who have taken these transfers could have received bad advice. It has taken far, far too long for regulators to even begin to step in and there is still a lack of information out there.”

On the issue of unscrupulous pension advisers, Mr Smith said: “Why can’t someone like the FCA help people find reputable advisors in their area very easily? Why are the rulings on these companies being investigated so opaque?

“There is a long-term pensions problem brewing if more is not done, and these steelworkers deserved better.”

Labour MP Frank Field, the chairman of the work and pensions committee, said that the Tata workers had been exposed to a “feeding frenzy”.

Mr Field added that Port Talbot was a honey pot for scammers. He said: “Transferring out of a gold-plated final salary pension is generally a terrible idea, except in very particular circumstances."