British Steel Feb 23 2023

FSCS declares BSPS firm in default after upholding claim

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FSCS declares BSPS firm in default after upholding claim
A worker from Tata Steel, some of whose workers were involved in the British Steel Pension Scheme issue.
BySally Hickey

The Financial Services Compensation Service has declared a firm in default after upholding a claim linked to the British Steel Pension Scheme.

Bailey Richards Wealth Management appointed a voluntary liquidator in April last year, according to Companies House, after posting net assets of £1,187 in 2021, down from £21,734 the previous year.

Of nine claims initially filed against it, the FSCS has so far upheld one, and yesterday (February 23) it declared the firm in default.

The FSCS also declared Corporate Benefits Consulting as failed yesterday, with one valid claim against it.

This claim is for pension transfer advice, but is not linked to the BSPS.

Corporate Benefits Consulting passed a special resolution in March last year to wind the company down, according to Companies House.

At the end of December 2021 the company had total assets of £443,992.

The 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.

But concerns about the suitability of the transfers were soon raised, leading to an intervention from the Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.

The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.

The FCA announced last year that it plans to deliver £71.2mn in compensation to former members of the scheme who received unsuitable advice. 

The scheme covers those who transferred out between May 26, 2016 and March 29, 2018. 

However, last month a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme