The UK’s financial watchdog has agreed that former members of the troubled British Steel Pension Scheme (BSPS) will be able to receive £71.2m worth of compensation, as part of long-awaited redress for workers.
The Financial Conduct Authority (FCA), which launched a probe for a redress scheme in late December, has found that almost half (46%) of the advice given to members of the scheme was unsuitable.
The 2017 scandal involved 7,700 BSPS members receiving advice to take their funds out of the pensions scheme – which they took and lost “significant sums of money as a result,” the NAO said in a statement at the time.
After an investigation, the FCA said it will take “strong action” against firms which have tried to avoid paying compensation, with one firm’s assets already frozen.
Those who may have been impacted, after taking advice from an insolvent business or one which no longer exits, can submit a claim to the FCA for compensation. Workers are expected to be receiving redress by late 2023, the watchdog noted in a statement today.
Executive director for consumers and competition at the FCA, Sheldon Mills said: “The circumstances around British Steel Pension Scheme transfers were exceptional, with former members receiving significantly higher levels of unsuitable advice compared with other cases. We want individuals who lost out financially after receiving unsuitable advice to receive compensation through our scheme.”
It follows the National Audit Office (NAO) launching a probe into the FCA’s handling of the British Steel transfer debacle in October last year. The audit watchdog said that it aimed to publish its findings in Spring this year.
The NAO’s investigation plans to support steelworkers who may be entitled to financial redress and work out how much compensation they could receive – an outcome which, today, has pulled through.
MPs had accused the FCA at the beginning of the last year of being “unfit for purpose” over its inability to help wronged consumers in the wake of the scandal.