British Steel  

BSPS redress could cost industry £300m, lawyer warns

The Financial Conduct Authority is looking for ways to reform the FSCS, reviewing the scope and coverage of the scheme in a bit to bring costs down.

Details of the review are to be published during the next 12 months but the regulator said that in the long-term, it wants firms that fail to do so in an orderly manner by changing capital adequacy rules.

It is also implementing measures to stop phoenixing, both in the adviser and CMC space.

The BSPS case

Three years ago British Steel Pension Scheme members were asked to decide whether to move their DB pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities, or to transfer out altogether.

As a result about 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.

But concerns about the suitability of the transfers were soon raised, leading to an intervention from the FCA that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service.

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