STEELWORKERS were "badly let down" and "left at the mercy" of rogue financial advisers when they told to opt out of a government pension scheme.

The British Steel Pension Scheme (BSPS) scandal caused many workers to lose out significantly because "pension sharks" provided unsuitable advice to leave the scheme. Claims records suggest the average sum victims lost was £82,600.

Blaenau Gwent MP Nick Smith called the scandal a "perfect storm" of industrial turmoil and rogue advisers who "swarmed" on steelworkers, "ripping them off".

"The government had introduced the requirement of receiving financial advice before transferring out of a scheme, and yet most advisers would only get paid if a transfer took place, a financial incentive to recommend transferring out," he said.

"These steelworkers were badly let down, left at the mercy of rogue advisers, scammers and shameless introducers without any of the necessary support or advice they needed."

A new report, published today, Friday, confirms the scale and severity of the scandal, with nearly half of the affected British Steel pension holders found to have received rogue financial advice and to have been failed by regulators.

The Financial Conduct Authority (FCA) has issued £1.3 million of fines to advisers and dozens of investigations remain ongoing, but many of the steelworkers who fell victim to the scandal have not been compensated fully, the new National Audit Office (NAO) report reveals.

Tighter regulation includes a ban on charges where advisers only get paid if a transfer proceeds.

But at least £18 million of BSPS victims' money has been lost, to date, as financial advisers went into liquidation.

Since news of the scndal broke, just one in four workers who were advised to leave BSPS have sought redress through the individual complaints procedure, and the NAO has called for more to be done to reach victims and help them seek redress.

“British Steel pension members were badly let down by placing their trust in the very system designed to protect them," Meg Hillier, MP and chairwoman of the Committee of Public Accounts, said.

“The handling of the BSPS case was a failure from top to bottom. Many of the pension advisory firms gave bad advice to customers and the FCA, whose job it is to regulate these firms, was asleep at the wheel."

The FCA is yet to decide on whether to bring in a consumer redress scheme for BSPS members. It expects to launch a consultation on the matter by the end of the month.