Thousands of former steelworkers who lost thousands of pounds when they were given unsuitable advice about their pensions are to get compensation, the Financial Conduct Authority has said. Many were poorly advised to transfer their savings out of the British Steel Pension Scheme (BSPS) by advisers who received financial incentives if people left the scheme.
The Financial Conduct Authority (FCA) found that almost half (46%) of the advice it reviewed relating to BSPS was unsuitable, something that was described as 'one of the biggest financial rip-offs of working people in south Wales'. A scheme announced on Thursday, March 31, will cover those who transferred out between May 26, 2016 and March 29, 2018. If it goes ahead, the FCA will publish rules setting out how advisers must determine whether they gave unsuitable advice and whether they must pay compensation. Independent checks and monitoring will be put in place to ensure that firms comply with the rules and consumers can be confident in the outcome of the review.
If confirmed, the scheme is expected to be in place by early 2023, with consumers starting to receive compensation from late 2023. The Financial Services Compensation Scheme will consider claims from individuals who received advice from an insolvent business or one which no longer exists.
