We are consulting on proposals for a redress scheme to ensure that British Steel Pension Scheme (BSPS) members who were given unsuitable advice to transfer from the scheme and suffered financial loss receive redress.
Why we are consulting
A large number of BSPS members suffered financial loss after being advised to transfer their pensions out of the scheme. We are proposing to implement a consumer redress scheme that requires firms who provided advice to transfer out of the BSPS to review the advice they gave, identify if it was unsuitable and calculate and pay redress to consumers where required.
We are taking this bold action to protect consumers. Former members of the scheme received significantly higher levels of unsuitable advice than other cases. So under our proposals, we want those who lost out financially after receiving unsuitable advice to get compensation through our scheme.
Who this applies to
This consultation is for:
- regulated firms who provided BSPS members with advice to transfer during the relevant period and their insurers
- industry groups / trade bodies
- individual consumers, particularly BSPS members who transferred their pension, and their representatives
- consumer groups
- insurers who provide professional indemnity insurance for financial advisers involved in pension transfers
If you’re a consumer, you will find more information on the redress scheme on our British Steel Pensions Scheme redress scheme page.
Background to the consumer redress scheme
Many members of the BSPS transferred out of the scheme after receiving unsuitable advice and have suffered financial loss as a result. We reviewed files from a sample of the firms who recommended transfers out of BSPS and have concluded that the unsuitable advice was widespread.
We have issued a Dear CEO letter to firms in scope of a potential redress scheme, reiterating our expectations that firms must have adequate financial resources, should retain assets for a potential redress exercise, and should not try to avoid their responsibilities.
We are asking for feedback on Question 19 in Chapter 6 by 12 May 2022 and feedback on the other questions in this CP by 30 June 2022.
To answer Question 19, email us at [email protected], or write to: Consumer and Retail Policy, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN.
To answer the other questions in this CP, complete the online response form, or write to: Consumer and Retail Policy, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN.
If you need to submit your response in an alternative format due to accessibility reasons, please contact us at [email protected].
As we receive responses to our consultation, we have provided answers to requests for further clarification.