The FCA is aware of concerns about the financial advice received by members of the British Steel Pension Scheme (BSPS). The BSPS is being restructured and this has prompted many members to consider if they should transfer out of a Defined Benefit (DB) scheme to a personal pension scheme.
Update (22 June 2020)
Today we published a letter from the FCA[1] to former members of the British Steel Pension Scheme whom transferred out. The FCA is concerned the advice they received may be unsuitable and they should consider taking action for any compensation they are potentially owed. The letter will help them revisit the advice they received, and complain where appropriate.
Update (1 March 2019)
The FCA is looking into the suitability of the advice that firms gave to members of the British Steel Pension Scheme (BSPS)[2]. We want to ensure that former members of the scheme know about their rights to make a formal complaint to the Financial Ombudsman Service[3], which is free and independent.
Update (12 March 2018)
As of 12 March 2018, ten firms have stopped providing pension transfer advice as part of our continuing work on BSPS. This is made up of nine voluntary requirements and one firm wishing to alter its business and voluntarily changing its permissions.
Update (15 February 2018)
Active Wealth (UK) Ltd has informed us it has filed for liquidation. BSPS members who were considering raising a complaint following the joint letter from the FCA, the Pensions Regulator and the Pensions Advisory Service should contact the Financial Services Compensation Scheme (FSCS) to discuss how to register a claim.
BSPS members who have already complained to the Financial Ombudsman Service should speak to their case handler to discuss next steps, including whether their complaint will be transferred to the FSCS for consideration. Visit the FSCS website[4] for more information, including how to contact them.
Update (6 February 2018)
A total of nine firms have now chosen to stop providing pension transfer advice as part of our continuing work looking into BSPS.
Update (12 January 2018)
The FCA is continuing its work in relation to BSPS. As of 12 January, a total of eight firms have chosen to stop advising consumers on pension transfers.
Information for members concerned about BSPS transfers (19 December 2017)
The FCA is aware that some members may be in the process of transferring out of the British Steel Pension Scheme, and could have concerns about whether the advice they received was suitable. The FCA along with The Pensions Regulator, which regulates the trustees and the British Steel Pension Scheme, recommends that members who have a pending transfer and are concerned about their decision, contact the scheme administrators who may be able to stop the transfer.
If a member has already transferred their pension and is concerned about the advice they have received, they should make a complaint to the firm and if they are still not happy, speak to the Financial Ombudsman Service[5].
The Pensions Advisory Service has a dedicated helpline for BSPS members and can be reached on 0207 932 9522.
Update (15 December 2017)
As a result of the FCA’s ongoing work related to financial advice that BSPS members are receiving, a total of six firms have chosen to stop advising consumers on pension transfers.
In response to concerns about the financial advice BSPS members were receiving, the FCA held four seminars in Swansea and Doncaster for advisers who specialise in pension transfers. 151 advisers attended these seminars, in which the FCA set out the standards it expects when pension transfer advice is given to consumers and the responsibilities firms have when dealing with unregulated introducers. The FCA also wrote to 148 authorised financial advisers in these locations explaining its expectations when advisers refer their clients to pension specialists.
The FCA has undertaken a significant information gathering exercise in order to identify which firms have been most active in advising consumers to transfer out of the BSPS. This included gathering information from 50 financial advice firms, 12 SIPP operators, and the BSPS scheme administrators. Based on the data received the FCA has visited seven advice firms and requested files from a further four advice firms. As a result of this work three firms have stopped advising consumers on pension transfers. The FCA plans to visit a further six firms this week.
This work has been co-ordinated with The Pensions Regulator and The Pensions Advisory Service, which has set up a dedicated helpline for BSPS members (020 7932 9522).
The FCA reissued its alert to consumers about how to protect their pension pot[6]. People are being urged to be aware of potential scams and visit the FCA’s ScamSmart website[7] to check for details of how to avoid putting their money at risk.
Next steps
The FCA will continue its previously planned work on DB transfer advice in the wider market. Last week the FCA sent out a questionnaire to 45 firms as part of the next phase of this work.
The FCA will also continue to keep the BSPS situation under review and further visits may take place.
The FCA welcomes any information which will help its work in this area. The whistle-blower helpline number is 020 7066 9200.
Defined Benefit transfers
The number of consumers transferring from their defined benefit (DB) schemes to personal pensions has significantly grown over the last few years.
As a result of this growth the financial advice on pensions transfers has been a key focus for the FCA. In October this year the FCA published an update on its work in this area[8].