Ex-BSPS members offered £106m in redress
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Former members of the British Steel Pension Scheme have been offered £106m in redress to put them back in the position they would have been in at retirement, by the Financial Services Compensation Scheme, the Financial Conduct Authority and the Financial Ombudsman Service. The BSPS redress scheme paid £8.7m as part of this.
The FCA, FSCS and FOS published a report on Wednesday saying at least 1,870 former BSPS members have been offered a combined £106m to compensate them for losses they incurred from transferring out of the scheme based on poor advice, on average about £57,000 per person.
Nearly half (46%) of the advice given to 7,700 people who transferred out when the BSPS was restructured in 2017 was later deemed unsuitable by the FCA. The regulator has since banned 15 people from working in financial services or holding a specific role, while £8.9m has been paid in fines and payments by firms to the Financial Services Compensation Scheme; some bans and fines are being appealed.
More than 6,500 former members have received support from FOS, FSCS or the redress scheme, the FCA said, of which nearly 4,000 were found to have received unsuitable advice.
The FCA noted that because it calculates redress based on the cost of buying an annuity that would give an equivalent income to the lost defined benefit pension, payments under the redress scheme are lower than the £50m it had estimated. In November 2022, following the ‘mini-Budget’, the FCA revised the cost of the redress scheme down to £49m, having put it at £71m in March that year.
“We understand some former BSPS members will be disappointed to have received no, or less, redress than they were expecting,” the regulators said, adding: “Redress aims to ensure, as far as possible, that former members are put back in their original financial position. So, some former members have received unsuitable advice but not been offered redress, as they have not lost out financially.”
Where firms that provided advice to BSPS members have gone out of business, the FSCS has attempted to contact customers. The regulators are also encouraging those who have either not yet had their advice reviewed or not yet received the result of their redress calculation to check if the firm that gave them advice has gone out of business, and make a claim with FSCS if this is the case.
