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British Steel Pension Scheme

Status: Closed Opened: 15 Mar 2022 Closed: 14 Oct 2022 5 recommendations 18 conclusions 1 report

When the British Steel Pension Scheme (BSPS) was restructured in 2017, its members were given a set of options for what to do with their pension “pot”, including transferring their funds out of the pension scheme altogether. Around 7,700 members, many of whom received independent financial advice to inform their decision, chose to take this … Show more

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Reports

1 report
Title HC No. Published Items Response
Fourteenth Report - Investigation into the British Steel Pe… HC 251 21 Jul 2022 23 Responded

Recommendations & Conclusions

3 items
6 Recommendation Fourteenth Report - Investigation into … Rejected

The current compensation arrangements do not always protect consumers, can create wider costs to firms...

The current compensation arrangements do not always protect consumers, can create wider costs to firms and may not have the capacity to cope with future risks in the advice market. The standard approach to redress relies on consumers seeking compensation themselves, but only 25% of BSPS members who received unsuitable … Read more

Government response AI summary
The FCA, FOS and FSCS will write to the committee on 21 January 2023 to explain what they are doing to manage risks in the redress system for financial service; the FCA disagrees with the recommendation to review its handling of the wider DB transfer …
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HM Treasury
13 Conclusion Fourteenth Report - Investigation into … Rejected

Alongside the unsuitable advice provided by firms, there have been other issues of non-compliance within...

Alongside the unsuitable advice provided by firms, there have been other issues of non-compliance within the BSPS case, including unregulated introducers and phoenixing. The FCA has identified that in 30% of BSPS cases members were introduced to their adviser by third parties, and whilst some introducers are authorised and regulated … Read more

Government response AI summary
The government disagrees with the Committee’s recommendation but welcomes the Committee’s view on the need for effective mechanisms to consider and, where appropriate, address concerns about activity that is not within the FCA's regulatory perimeter. The government has concluded that, on balance, the key mechanisms …
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HM Treasury
18 Conclusion Fourteenth Report - Investigation into … Rejected

The FCA’s response to the BSPS case highlights wider issues within its regulatory approach.

The FCA’s response to the BSPS case highlights wider issues within its regulatory approach. Alongside the estimated 369 firms and advisers that provided unsuitable advice to BSPS members, the FCA found that 17% of DB transfer advice was unsuitable within the wider market. This is a significant proportion of non-compliance, … Read more

Government response AI summary
The FCA disagrees with the Committee’s recommendation and does not consider that a review of how it is handling the wider DB transfer market should be undertaken, stating that the harm associated with BSPS is unique and not replicated elsewhere.
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HM Treasury

Oral evidence sessions

2 sessions
Date Witnesses
13 Jun 2022 Andrew Bailey · Bank of England, Emily Miles · Department for Environment Food and Rural Affairs, Michael Grenfell · Competition and Markets Authority, Sarah Albon · Health and Safety Executive View ↗
27 Apr 2022 Caroline Rainbird · Financial Services Compensation Scheme (FSCS), Nausicaa Delfas · Financial Ombudsmen Service, Nikhil Rathi · Financial Conduct Authority, Philippa Hann · Clarke Willmott LLP, Rich Caddy · British Steel Pension Scheme, Sheldon Mills · Financial Conduct Authority, Tim Fassam · Personal Investment Management and Financial Advice Association (PIMFA) View ↗

Who gave evidence

11 witnesses
WitnessOrganisationSessions
Andrew Bailey · Governor Bank of England 1
Caroline Rainbird · Chief Executive Financial Services Compensation Scheme (FSCS) 1
Emily Miles · Director for General for Food, Biosecurity and Tr… Department for Environment Food and Rural Affairs 1
Michael Grenfell · Executive Board Member Competition and Markets Authority 1
Nausicaa Delfas · Interim Chief Executive and Chief Ombudsman Financial Ombudsmen Service 1
Nikhil Rathi · Chief Executive Financial Conduct Authority 1
Philippa Hann · Managing Director Financial Litigation Clarke Willmott LLP 1
Rich Caddy · Former Member British Steel Pension Scheme 1
Sarah Albon · Chief Executive Health and Safety Executive 1
Sheldon Mills · Executive Director of Consumers and Competition Financial Conduct Authority 1
Tim Fassam · Director of Government Relations & Policy Personal Investment Management and Financial Advice Association (PIMFA) 1

Correspondence

1 letter
DateDirectionTitle
23 May 2022 — Correspondence from Nikhil Rathi, Chief Executive, FCA – Financial Conduct Auth…