Defined Benefit 

Several firms behind half of British Steel transfers

Several firms behind half of British Steel transfers

A small number of firms were behind almost half of all British Steel pension transfer cases probed by the Financial Conduct Authority.

According to FTAdviser sister newspaper the Financial Times, the watchdog had assessed the pension transfers of 1,911 steelworkers, with a quarter of these transferring out.

In a letter to Nick Smith, the MP for Blaenau Gwent, the FCA’s chief executive Andrew Bailey revealed 872 of these were arranged by a small group of firms which stopped advising on transfers after the regulator intervened.

But Mr Bailey said he could not provide a breakdown of transfer figures for individual firms, because this would breach the Financial Services and Markets Act, which prohibits the disclosure of confidential information.

"We are also conscious that we do not prejudice the continuing work that we are doing related to BSPS and financial advice more generally," Mr Bailey wrote.

To date there have been 8,000 transfers out of BSPS, collectively worth about £2.8bn.

After the regulator intervened, 10 firms voluntarily gave up their permissions. Of these, only two have regained the right to advise on pension transfers.

Members of BSPS had to decide by December whether to move their defined benefit pension pots to a new plan being created, BSPS II, or stay in the current fund, which would be moved to the Pension Protection Fund.

The scheme had about 130,000 members of which 43,000 were deferred, which meant they had the option of transferring out of their pension.

In November several steelworkers appeared to be transferring out their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth, now in liquidation.

In the meantime, a group of steelworkers in Port Talbot has instructed a solicitor firm to pursue a legal case against all parties involved in the pension transfer scandal.

30 October 2018: This article has been amended to make clear that more than 800 British Steel workers were persuaded to give up their defined benefit pensions by advisers working for several separate firms, rather than one firm as incorrectly reported in an article on 12 October on the basis of an unclear statement by the FCA which it has since clarified.