STEELWORKERS who fell victim to "pension sharks" and lost money may finally receive compensation.
Many members of the British Steel Pension Scheme (BSPS) fell victim to poor financial advice when they were encouraged to transfer their pensions out of the government fund.
Claims records suggest the average sum victims lost was £82,600.
While some of the advisers at fault have since been fined by the Financial Conduct Authority (FCA), many victims of the scandal have not been compensated or have not come forward to make a complaint.
The FCA has now opened a consultation on a proposed redress scheme that would allow BSPS victims to apply for compensation. It is proposed the scheme will cover steelworkers who transferred out of BSPS between May 26, 2016 and March 29, 2018.
If it goes ahead, the FCA will publish rules setting out how advisers must determine whether they gave unsuitable advice and whether they must pay compensation. Independent checks and monitoring will be put in place to ensure that firms comply with the rules and consumers can be confident in the outcome of the review.
If confirmed, the scheme is expected to be in place by early 2023, with consumers starting to receive compensation from late 2023.
But victims can make a complaint now rather than waiting for the outcome of the consultation. This is especially important for people who fell victim in 2016, because the time limit to complain is usually six years after the advice was given. Information about making a complaint is available on the FCA’s website.
“The circumstances around British Steel Pension Scheme transfers were exceptional, with former members receiving significantly higher levels of unsuitable advice compared with other cases," said Sheldon Mills, the FCA's executive director for consumers and competition. "We want individuals who lost out financially after receiving unsuitable advice to receive compensation through our scheme.”
Blaenau Gwent MP Nick Smith, who has been campaigning for BSPS victims to be properly compensated, welcomed the consultation but said it was long overdue.
“It's been like pulling teeth to get to this point, but I'm very glad to hear that the Financial Conduct Authority will be delivering a redress scheme for steelworkers," he said. "I have been working with steelworkers and campaigners on this for four years now and I know the toll it has taken on so many.
“I have been pushing for a redress scheme because I believe this is the best way to put things right for the steelworkers that were targeted by pension sharks.
“I’ll be looking at the details of the scheme to see if further improvements are needed and will get a chance to speak with the regulators again at a Public Accounts Committee hearing on April 27.
“This is a positive step forward in putting this injustice to bed. I still want to see those responsible for this scandal suitably punished, not just the rogue advisers but also their introducer accomplices.”
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