Insurance giant Prudential has been fined £23.9m by the City regulator for mis-selling retirement income products to its pension customers.

The Financial Conduct Authority (FCA) said the company should have advised customers they might get a better deal by shopping around for annuities on the open market.

But the FCA found a lack of controls to make sure this happened and that staff were offered bonuses and incentives including spa breaks and weekends away for selling Prudential's own products.

Prudential has already agreed to review past annuity sales - and as of this month has offered £110m in compensation to more than 17,000 customers.

The FCA said the company had contacted the vast majority of affected customers.


Mark Steward, executive director of enforcement and market oversight at the watchdog, said: "Prudential failed to treat some of its customers, who could have secured a better deal on the open market, fairly.

"These are very serious breaches that caused harm to these customers.

"Today's financial penalty reinforces the cardinal obligation of fairness that firms owe to customers."

An annuity is a product that pays a regular income in retirement. Customers buy annuities using pension pots saved up over their working lives.

The FCA stressed that customers require accurate information when choosing an annuity because it is a complex financial product which can affect a customer for life.

Those who have a shortened life expectancy, for example, may be eligible to purchase an enhanced annuity.

The FCA fine focused on Prudential's sales of annuities directly to existing pension pot customers who it contacted to discuss retirement options, between July 2008 and September 2017.

It said the firm "failed to ensure that customers were consistently informed that they may get a better deal if they shopped around".

The FCA also said there was a failure to ensure documentation used by call handlers was appropriate, and a failure to monitor their calls.

In addition, prior to 2013 there had been sales-linked incentives for call handlers and their managers including bonuses worth up to 37% of salary as well as prizes.

Rival firm Standard Life was fined £30.8m in July for similar failings.