At the end of 2017 when the British Steel Pension Scheme (BSPS) was set to close, British steel workers had to decide which scheme their pensions would be moved to. Workers were given three options, transferring to the Pension Protection Fund (PPF), a government-operated pension lifeboat, transferring to the new BSPS 2 scheme, or transferring into a personal pension.
Unfortunately thousands of steel workers relied on advice from financial advisors and believed that transferring into a personal pension was best for them. However transferring out of a defined benefit pension and losing the associated benefits, is rarely a good idea and not in your best interests.
As of February 8th 2022, the FSCS has received 1,263 claims from British Steel workers, of which 638 claims have been upheld and only 74 have been denied, the remainder are still being processed.
The uphold rate is 90% for British Steel complaints and while the average time to resolve them is 111 days.
The FSCS have already paid out over £36.5 million to British Steel Pension Scheme members as the lifeboat fund and FCA call on more steelworkers to claims against IFA's.
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The FSCS found that the returns needed by the former BSPS members’ new pensions were unrealistic to match the benefits offered by the BSPS2 or the PPF and the customers would have been better off if they had not transferred to a private plan.
If you transferred your British Steel pension into a private plan, you could be entitled to compensation. The following companies were involved in British Steel pension transfer and have already been declared in default by the FSCS or are in liquidation. Anyone that has dealt with these firms can now make a claim for compensation from the FSCS.
The FSCS is recommending that anyone who transferred out of the British Steel Pension Scheme should make a claim, even if you are happy with your decision to transfer. If you don't you may end up with less money in retirement than you should have. The FSCS may be able to compensate you up to £85,000.
Mr. D received bad advice to transfer his British Steel Pension.
He was awarded £85,000 compensation.
Mr. M received bad advice to transfer his British Steel Pension.
He was awarded £48,773 compensation.
Mr. G received bad advice to transfer his British Steel Pension.
He was awarded £40,143 compensation.
If you have worked with any of these firms, you could be entitled to compensation.
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You do not need to use any third party to present a claim to either The Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS). You can make your own representation to them and their services are free.
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