The FCA has paid out just £8.7 million of the estimated £50 million redress scheme due to “changing economic conditions” and is urging all former BSPS members to make a claim.
The British Steel Pensions Scheme scandal made headline news and forced reviews and changes across the whole pensions industry. Steelworkers were offered the choice of moving their new pension into new schemes when Tata, British Steel’s new owner, restructured the pension, or transferring out entirely into their own personal pension. The floodgates opened for unscrupulous financial advisers, who gave members of the British Steel Pensions Scheme (BSPS) unsuitable pension transfer advice, causing many to transfer into riskier pensions and lose out financially.
The Financial Conduct Authority (FCA) is the UK’s financial services regulator. It estimated that 49% of steelworkers received unsuitable advice about their pension and worked with the Financial Ombudsman Service (FOS) and Financial Services Compensation Scheme (FSCS) to develop a redress scheme to compensate people who lost money by transferring out of their occupational pension.
FOS is an independent body set up to settle disputes between financial institutions and their customers and the FSCS is a scheme established to compensate clients of any FCA authorised firms that have gone out of business and couldn’t meet the cost of claims against them.
Given the scale of the BSPS scandal, the thousands of steelworkers affected, and the complexity of the claims against firms that were still in business and those that weren’t, all three organisations worked together on the redress scheme, which was estimated to pay out £50 million.
Latest redress update from FCA
+ −The FCA has recently published an update on how the redress scheme is progressing. It said:
- Redress is the amount of money needed to put the person back in the financial position they would have been in, had they not left the BSPS.
- Redress is calculated on the cost of buying an annuity to top up retirement income shortfall, and the cost of these has fallen in recent years.
- Only £8.7 million of the original estimated £50 million has been paid out, due to these ‘changing economic conditions’, meaning some former BSPS members received no redress, or less than they were expecting.
- A total of £106 million has been offered to 1870 former steelworkers, made up of FSCS claims before the redress scheme (£69.7m), FCA skilled person reviews (£19.3m) and FOS claims (£8.4m), in addition to the redress scheme.
Given that there is still money left in the ‘redress pot’, the FCA is urging all former BSPS pension holders to have their financial advice reviewed and to pursue a claim with the FSCS, if they haven’t already done so.
TLW Solicitors’ View
+ −Sarah Spruce, Legal Director at TLW Solicitors, says:
“From the British Steel clients we deal with, many of them find the claims process overwhelming. It can be tricky for them, and indeed in some cases their widows, to work out where to start with the claims process. There are different factors to consider, such as who to submit a claim to, whether your financial adviser has gone out of business and when that happened.
I would reiterate the FCA’s message and urge all former BSPS members to dig out their paperwork and take another look. Our specialist BSPS claims team can help you navigate the complex process, ensuring that you submit all of the correct information and recover the amount of compensation you are rightfully owed as quickly as possible.”
TLW Solicitors are Pension Transfer Mis-selling specialists
+ −Our experienced team will review your case on a no-obligation basis and advise on next steps. The FSCS is still accepting new BSPS claims, but don’t delay. We operate on a no-win, no-fee basis, meaning you don’t pay us for the work we have done if your claim is unsuccessful. The service we provide is:
- Hassle-free – let us do all the paperwork for you if you don’t have time to make a claim.
- Proactive – we will actively pursue your claim, ensuring you get the compensation you are owed in a timely manner.
- Knowledgeable – we understand the complex legal and financial jargon and know how to navigate the claims and appeals processes.
Get in touch – TLW Solicitors can help
+ −If you are concerned about your former British Steel Pension or that of a friend, family member, or spouse, please contact TLW Solicitors. You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk, or complete one of the forms below.
It is important to get advice as soon as possible as strict time limits can apply.
Minimum claims values apply.
Meet the Team
Meet Sarah, who heads up our experienced Professional Negligence Claims team.
Sarah and her colleagues are on hand to help with your claim.
TLW Solicitors pledge to:
- Always fight your corner.
- Explain anything you don't understand.
- Provide full transparency on our charges.
- Never ask for any upfront payment.
- Recover the best compensation we can.
- Keep your personal information safe.
- Respond quickly to any queries.
