Recommendation 4

The way that compensation has been provided in the British Steel Pension Scheme case has been slow and unfair. BSPS members face significant delays in receiving compensation. Complaints made to the Financial Ombudsman Service take on average eight months to be completed with many taking significantly longer. Many BSPS members have not received the full amount of compensation owed to them and members who have sought redress through the Financial Services Compensation Scheme (FSCS) have lost £21 million in compensation due to FCA imposed financial limits. There are also significant variations in the amount of compensation awarded to BSPS members based on when redress is calculated. Due to changes in the way redress is calculated, members who sought compensation early have received significantly less than those who claimed compensation after 2021. Only 25% of all BSPS members who received unsuitable advice have raised claims with redress organisations, yet the FCA has taken five years to propose a consumer redress scheme for members. Despite gathering evidence on the case since 2018, the FCA only began considering the potential use of a scheme and analysing its impacts in early 2021. Recommendation: In considering the implementation of a consumer redress scheme for BSPS members the FCA should consider how further redress mechanisms can be implemented more quickly and provide fair compensation. It should also consider how to resolve differences in the levels of compensation received by BSPS members to date, and how this compares to the amount that other members will receive from the proposed FCA redress scheme.