More than 1000 former members of the British Steel pension scheme are set to be paid £49m after the UK’s financial watchdog ruled they received wrong advice from financial advisors looking to pocket huge fees.
In a statement this morning, the Financial Conduct Authority said that almost half the advice given to members was “unsuitable”, which it described as an “an exceptionally high level compared with other cases”.
The regulators’ executive director for consumers and competition, Sheldon Mills, said the FCA would now roll out the redress scheme so burnt scheme members can “get the retirement they worked for”.
‘We’re working to get the scheme in place quickly to end uncertainty for members,” Mills said.
“We will be watching advisers closely and have put in place checks so that consumers can have confidence that they’re being treated fairly under the scheme.”
The watchdog said consumers should now be contacted by their financial advisers between 28th February and 28th March, with advice being reviewed by the end of September 2023.
The roll out of a redress comes after members of the pension scheme were wrongly advised to transfer their savings out of the scheme during a restructuring of the scheme in 2017. Advisors were found to have acted in their own interests and pocketed huge fees as a result.
Workers are set to now be paid an average of £45,000 each, the FCA said. The scale of the payments is set to push some advisers into bankruptcy, with around 40 firms expected to go under, the FCA said, as reported by Citywire.