Barclays forced to pay £60m to compensate for 'bad advice'

The bank has been fined millions of pounds for advising customers to invest retirement funds.

Barclays has been forced to pay out millions of pounds in compensation to customers given poor advice.

Thousands of people who invested their retirement savings with the bank were exposed to more risk than they were comfortable with, and found they lost money when the economic crisis struck.

The bank has been fined £7.7m by the Financial Services Authority and will have to pay £60m compensation to customers of Balanced and Cautious Funds.

Barclays accepted it had "let customers down" and has apologised after 1,730 of the 12,331 investors complained about the advice they were given.

Sue Murton, from Aldeburgh, wanted to boost returns from her savings because she was receiving poor interest rates which meant the value of her money was shrinking against inflation.

She was looking for a "cautious-to-medium" risk investment and was advised by Barclays to put £50,000 into the "Balanced Fund", believing it to be matched to her relative unwillingness to take big risks. However, within months, she had lost £17,000.

Investments made to Aviva's Global Balanced Income Fund - the Balanced Fund - and the Global Cautious Income Fund - the Cautious Fund through Barclays totalled £692m.

Paul McNamara, managing director of insurance and investments at Barclays, said: "We know that on this occasion we let our customers down and did not do all we could have done to meet the high standards that our customers expect from us and for this we are sorry.