Newport-based Niche Independent Financial Advisers declared ‘In Default’ by FSCS

The British Steel Pension Scheme (BSPS) was a defined benefit scheme, guaranteeing members a certain level of retirement income.

Members were advised in 2017 that the scheme would be restructured. They were given the option to stay in the existing scheme (but likely end up with a reduced pension) or move to the new BSPS scheme (with the same pension benefits but lower future increases). Of the 130,000 members consulted, a significant number chose to transfer their pensions elsewhere.

Nearly 8000 BSPS members transferred to other pension products, including Self-Invested Personal Pensions (SIPPs), but it soon became clear that many received unsuitable financial advice and lost out financially. Given the guaranteed benefits that come with these workplace pension schemes, it is rarely considered good advice to transfer out.

The BSPS scandal resulted in the government’s Work & Pensions Committee publishing a review in February 2018. The Pensions Regulator conducted an independent review and published its report in January 2019. The National Audit Office published the results of its own investigation in March 2022, and a report by the government’s Public Accounts Committee was published in July 2022.

Around 1300 steelworkers had made complaints to the FSCS by March 2022. The average amount lost was £82,600, ranging from some who were no worse off financially to others who lost hundreds of thousands of pounds.

The FSCS can step in and pay up to £85,000 per claim if a financial firm has gone bust and can’t pay any claims against it. The limit was £50,000 for firms that failed before April 2019.

By March 2022, the 1300 steelworkers who claimed had been paid over £37 million in compensation, but their total loss was estimated to be over £55 million.

By November 2022, the FSCS had paid out over £69 million. Financial firms had also paid out £35 million.

The financial services regulator, the Financial Conduct Authority (FCA), received considerable criticism for not having proper oversight of the financial advice firms involved in conducting the pension transfers, and for not taking preventative action to protect the steelworkers from mis-selling.

By November 2022, the FCA had put a redress scheme in place, with compensation worth more than £71 million. The FCA’s own research suggests that 46% of the nearly 8000 steelworkers who transferred their pensions out of the BSPS received unsuitable financial advice. The redress scheme aims to put the steelworkers “back in the position they would have been in, had they not received the poor advice”.

The FSCS has published a list of firms that are linked to the BSPS scandal and have gone out of business. If one of the firms on the list advised you, your claim should be made through the FSCS: we can help.

Other firms may still be trading and your complaint should be made directly to them, or to the Financial Ombudsman Service (FOS): again, TLW Solicitors can help.

TLW Solicitors specialises in financial mis-selling claims. We have years of experience taking claims to financial firms, the FOS and the FSCS. We routinely deal with both the claims and often complex appeals processes.

We will work with you to ensure that all the necessary information is submitted with your claim, that your claim keeps progressing, and that you get the best result possible.

While it is possible to make a claim yourself, many clients tell us that they do not have the time or knowledge to deal with financial jargon, complex documentation, legal arguments, and maintaining momentum.

“Excellent service; a fantastic result; something I would never have had the know-how to achieve myself.” – Mrs M

Peter McKenna, TLW Director, says:

“Our process starts with a free, no-obligation review of your case, so I would encourage you to get in touch. If you were a client of Niche Independent Financial Advisers Ltd or any of the other financial advice firms associated with the British Steel pension scandal, or if you have already tried to make a claim but been refused, our team will be able to talk you through your options. The FCA’s redress scheme covers people who transferred out between 26th May 2016 and 29th March 2019. Why wait any longer to get your retirement planning back on track?”