£106m in redress offered to former British Steel Pension Scheme members

Over £106m in redress has been offered to 1,870 former members of the British Steel Pension Scheme (BSPS) to restore their financial position at retirement. More than 6,500 former members have been supported by the Financial Ombudsman Service (FOS), Financial Services Compensation Scheme (FSCS), or through the redress scheme.

The Financial Conduct Authority (FCA) has been working closely with FOS and FSCS to assist those who transferred out of the BSPS following poor advice, ensuring they receive the retirement they worked for. As the redress scheme draws to a close, the FCA has reported on the joint actions taken, the number of advice reviews conducted, and the total redress offered.

Despite changing economic conditions, the money paid out under the redress scheme (£8.7m paid by firms or FSCS) is lower than the originally estimated £50m. Redress is calculated based on the funds needed to top up a personal pension to purchase an annuity at retirement, providing an income similar to what would have been received had the individual remained in the BSPS.

The expected cost of funding a guaranteed retirement income through an annuity has fallen since the redress scheme was introduced. Consequently, some former BSPS members may be disappointed to receive no or less redress than expected. Redress aims to restore members to their original financial position, meaning some who received unsuitable advice did not suffer financial loss and thus were not offered redress.

The FSCS has attempted to contact customers where firms providing BSPS advice have gone out of business. Former BSPS members who have not yet had their advice reviewed or received their redress calculation result are encouraged to check if the advising firm is out of business and, if so, make a claim with FSCS.

The FCA continues to hold accountable those who caused significant harm through poor financial advice, resulting in 15 individuals being banned from working in financial services or holding specific roles, and fines or payments to FSCS totalling approximately £8.87m. Some bans and fines are being appealed.

Where appropriate, the FCA has sought payments to be made to FSCS rather than imposing financial penalties, ensuring that those responsible for wrongdoing pay the redress owed.