The UK’s financial regulator has launched a consultation on a redress plan for former British Steel workers who were advised to transfer their pensions in what has become a multimillion-pound scandal.
The Financial Conduct Authority move comes in the wake of a push two months ago from the National Audit Office, the parliamentary spending watchdog. The NAO is to investigate the FCA over its handling of the pension affair, dating back to 2017, that affected thousands of steelworkers.
The FCA said on Wednesday that it expected to gather evidence to begin its consultation by the end of March.
As many as 47 per cent of steelworkers received “unsuitable” pension transfer advice, FCA analysis revealed, prompting the watchdog to call the British Steel scheme a “highly exceptional case”.
The City watchdog, in a letter sent on Wednesday, set out its expectation that companies in the scope of a redress scheme should not seek to shirk their responsibilities. The FCA warned it would act as necessary if a company attempted to avoid its liabilities.
The NAO’s investigation follows accusations from Welsh MPs that failures and delays in the regulation of authorised independent financial advisers contributed to thousands of former members of the British Steel scheme being wrongly advised to transfer valuable guaranteed pensions.
The FCA is encouraging up to 7,700 former British Steel scheme members to revisit pension transfer recommendations they received and complain if they have concerns.
The regulator imposed its first fine in August on an adviser it described as “seriously incompetent” for retirement savings transfer recommendations to members of the British Steel pension scheme.
