Calls have been made by a law firm that represents British Steel pension scheme claimants for the Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme (FSCS), and the Financial Conduct Authority (FCA) to temporarily delay financial redress being paid due to concerns that the current economic conditions will result in compensation that is inadequate.
With redress calculations being made during the current inflationary climate, claimants would end up receiving much less compensation than if they had been calculated this time last year. This is due to the fact that redress calculations are based on quarterly market assumptions of the price of gilt yields. Because their price has increased significantly over the last year, the value of redress will undoubtedly be less.
An associate from the law firm has contacted both the FOS and the FSCS to ask if they will suspend any complaints that are in progress already until the FCA consultation has completed on how to calculate redress and if any changes to the redress methodology are going to be implemented. The firm is asking that the FSCS tops up financial compensation payments that are owed to British Steel workers where new calculations reveal a higher figure.
The British Steel Pension Scheme (BSPS) has been at the centre of significant controversy and claims due to the mishandling of pension transfers. During a critical restructuring phase in 2017, many members were encouraged, often by unscrupulous financial advisers, to transfer their pensions out of the BSPS into less secure, private schemes. Motivated by high transfer values and inadequate advice, a substantial number of steelworkers moved their pensions, only to face substantial financial losses and insecurity. This led to a wave of compensation claims against the advisers involved, culminating in regulatory scrutiny and legal actions. The Financial Conduct Authority (FCA) intervened to review the transfers and the conduct of the advisers, many of whom were found to have given poor advice that was not in the best interests of the pension holders. As a result, numerous claims have been filed for compensation to address the financial detriment suffered by the affected steelworkers, highlighting the need for stringent oversight and protection in pension management and advisory services.
