A former HSBC cashier from Heanor has joined a nationwide call for the bank to address a clause in its pension scheme which will mean staff lose out on £450million owed.
Elaine Broughton, 59, was among a generation of employees at what was then the Midland Bank who joined the pension scheme between 1975 and June 1996.
With many now reaching retirement age, they are coming to realise that the bank included a contractual clause which allows it to ‘clawback’ some or all of the value of a state pension from employees’ retirement plans.
Elaine said: “I only worked there for eight years, and I began claiming my pension at 50, so it’s not huge sums of money for me, but I will lose 22 per cent of it when I turn 66.
“For other people, mainly women and those who spent long careers in low paid roles, it will add up to thousands of pounds. Many like me were never made aware that this would happen.”
She added: “I just want to get this message out there because it seems so unfair that people who worked for 30-40 years will come to receive their pension and it will be a lot less than they expect.
“In some cases that will cause people real problems and push them into financial difficulties.”
It is estimated that about 52,000 former employees of HSBC are affected, with some losing up to £2,500 a year once they reach retirement.
As the ‘clawback’ is a fixed amount, it means that it will have a disproportionate impact as high- and low-earners will lose the same.
The clause, called a ‘state deduction’ by the bank, was a feature of the UK pensions system first introduced in the 1940s to integrate private coverage with the welfare state.
Elaine said: “When I first came across it, the name made it seem like it was the state taking the money. It’s annoying that they put it like that.”
By the 1970s, many employers were phasing it out, just as HSBC introduced it for all new staff joining the scheme. Other companies have opted not to implement similar clauses.
The bank wrote to affected staff in 2018 to clarify the situation, and has since said it would cost £450million to scrap clawback.
Elaine said: “When you think of how much money HSBC makes, that’s just seems like a drop in the ocean.
“It’s not illegal, it’s just a bit immoral. They say it was always printed in a booklet somewhere, but there are thousands of us in this situation. How could that many people not have known?”
Former employees brought the situation to light via reminiscence groups on Facebook, which have now spawned an action group backed by several MPs.
They succeeded in pushing for a vote on the issue at the HSBC AGM on April 12, but the bank directed shareholders to vote against changing course.
For more information, see midlandclawbackcampaign.co.uk.