British Steel Feb 17 2023

Steelworkers write to FCA boss about BSPS redress

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Steelworkers write to FCA boss about BSPS redress
BySonia Rach

A number of steelworkers have written to Financial Conduct Authority boss Nikhil Rathi expressing concerns about the regulator’s calculations for the BSPS redress scheme.

In March, the FCA introduced a redress scheme for former BSPS members who have not complained.

Under the scheme firms will have to review the advice they gave and pay redress to those who lost money because of unsuitable advice.

It estimated that 1,400 steelworkers will receive £71.2mn in redress under the scheme. 

However a number of steelworkers have written to Rathi expressing concern about the amount they have been compensated, compared to a colleague in the same scenario.

In an email seen by FTAdviser, one steelworker said: “I believe the amount awarded is nowhere near to compensating me. How can I be different to people working alongside me with the same scenario of getting full compensation?

“It has caused me very much stress, anxiety and depression resulting in a nervous breakdown in 2021. 

“I served my country for 8 years including active service and 31 years in the steel works only to be done over and that's putting it politely by the FSCS by poor compensation.”

In another email, a steelworker said the way the FCA has handled the whole process of people who have transferred out of BSPS “has been very poor” and had a massive impact on their mental health.

The individual, who at the time of transferring, was 35 years old, said: “We had a very short deadline with no time to think things through when our pensions were at high risk.

“I feel this could have all been avoided if the FCA had reacted swiftly at times."

It took this specific steelworker over 10 months for the claim to be viewed and finalised and when it was, it was described as a “shocking” difference between payouts from February 2022 compared with August 2022. 

“I have been completely penalised by the length of delays by FSCS/FCA to view my claim and my pay-out is less than half of my colleague of the same age, service and circumstances,” they wrote. 

There have been a number of steelworkers who have written to the FCA boss along the same lines, stating that their compensation has been very low when compared to colleagues who were paid out earlier. 

“It’s due to market conditions the date it’s calculated, I find this incredulous and very frustrating,” one said. “The calculation should be from the date I was transferred surely.”

BSPS case

During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.

About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.