We set out final rules for a redress scheme for former members of the British Steel Pension Scheme (BSPS) who transferred out after being given unsuitable advice to do so.
What we are changing
We have found that many BSPS members suffered financial loss after being advised to transfer out. Our evidence suggests 46% of all transfers were unsuitable.
In CP22/6 we proposed 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 the unsuitable advice caused a financial loss.
Who this is for
- Consumers who were members of BSPS and were advised to transfer out
- Firms who advised members to transfer out of BSPS
The scheme will start on 28 February 2023, allowing firms to prepare for implementation by that date. Firms will have until 28 March 2023 to identify all consumers within scope of the scheme. Firms must write to all BSPS consumers within and outside the scope of the scheme by 28 March 2023.
The letter will explain to the consumer that either:
- the firm will review the advice to transfer, unless the consumer decides to opt-out
- the case falls outside the scope of the scheme, so they will not review the advice to transfer, but they may still be able to make a complaint in certain circumstances.
If consumers do not receive a letter from the firm by 28 March 2023, they should contact us on 0800 098 4100. Former BSPS members can find more information on how the scheme will work.
If you are concerned about decisions the firm has made under the scheme, or the firm has not completed the scheme steps within the relevant time limits, you can contact the Financial Ombudsman Service.
In CP22/15 we consulted on redress calculation rules and guidance for the proposed scheme, as part of a broader consultation on changes to the general methodology for calculating redress for non-compliant pension transfer advice. We have also published final rules and guidance in PS22/13 relating to the general methodology.
We also consulted in CP22/22 on extending the temporary asset retention rules that came into force on 27 April 2022, to ensure that the rules continue to apply until firms have resolved all relevant BSPS cases that are subject to the rules of the consumer redress scheme, and all other relevant BSPS cases outside the scheme. On 27 January 2023, we published PS23/1 confirming the final rules.
Following the publication of PS22/14 in November 2022, in January 2023 we published an addendum to amend the text on page 77 where we discuss our Cost Benefit Analysis (CBA) calculations for estimated average redress. As we already explain in detail in the CBA which accompanied PS22/14, the new amended text clarifies that while we modelled a reduction in estimated average redress as part of a sensitivity analysis we carried out on our estimates, this modelling does not change the central scenario used in our CBA.
On 27 January 2023, we sent a Dear CEO letter to firms. This letter set out our expectations of firms that have either received proceeds from a BSPS transfer or continue to be involved in managing the transferred assets, under the BSPS redress scheme.
On 31 March 2023, we published Handbook Notice 108, which sets out minor amendments made to the scheme rules.