British Steel Jun 5 2020

FCA writes to 7700 steelworkers to review advice

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FCA writes to 7700 steelworkers to review advice

The City watchdog is to write directly to around 7,700 former members of the British Steel Pension Scheme to invite them to revisit the advice they received — and complain if they have concerns.

In an update on the Financial Conduct Authority’s work on defined benefit transfer advice, published today (June 5), the watchdog said it had found the percentage of British Steel members given unsuitable transfer advice was higher than average.

Only 21 per cent of the 192 instances of advice to former British Steel members reviewed by the FCA appeared to be suitable, 47 per cent was unsuitable and 32 per cent contained information gaps.

It said: “Given these latest findings, the FCA intends to write directly to all 7,700 former members of BSPS for whom contact details are available, who transferred out. 

“This will help them revisit the advice they received, and to complain if they have concerns.” 

The regulator has already undertaken a number of actions designed to help those who transferred out of the British Steel Pension Scheme. Last year it hosted a series of events in Port Talbot for steelworkers “concerned about the advice” they received.

It has also previously written to almost 4,000 former scheme members advising them how to complain.

The British Steel pension transfer scandal came about after members of the British Steel Pension Scheme were asked to decide what to do with their pensions as part of a restructuring process in 2017.

Almost 83,000 of the 130,000 members chose to move into a new scheme while some 39,000 were put into the PFF as they did not express a choice.

A further 8,000 transferred out of their DB scheme, with transfers collectively worth about £2.8bn.

Consumers were given advice to transfer out of the scheme despite the regulator stating earlier the same year (June 2017) that transferring out of a DB scheme was rarely in the consumer’s best interest.

Concerns about the suitability of the transfers were soon raised leading to an intervention from the FCA, which resulted in 10 firms — the key players in the debacle — stopping their transfer advice service.

Some have regained them since while others left the industry altogether.

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