Financial Services Compensation Scheme  

FSCS reveals British Steel claims tally

FSCS reveals British Steel claims tally

The Financial Services Compensation Scheme has paid out nearly £32,500 per steelworker over botched pension transfer advice from a now-defunct advice firm.

In an outlook paper, published today (December 17), the lifeboat scheme said it has to date paid a total of £2.4m to steelworkers who had been advised to transfer out of the British Steel Pension Scheme by adviser Active Wealth.

This averaged at just over £32,400 per claimant, the FSCS said. To date, the scheme has received 86 claims against Active Wealth from British Steel workers who were advised to transfer out of their DB scheme and into self-invested personal pensions.

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Of these, 74 have been upheld while the remaining 12 were not eligible for compensation as no financial loss had occurred. 

Active Wealth entered creditors’ voluntary liquidation in February of last year and by the end of March had been declared in default by the FSCS. The firm was the first British Steel adviser to be stripped of its pensions transfer permissions by the Financial Conduct Authority shortly before.

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 defined benefit 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 firms have since regained their permissions.

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