Source · Select Committees · Public Accounts Committee

Fourteenth Report - Investigation into the British Steel Pension Scheme

Public Accounts Committee HC 251 Published 21 July 2022

Report Status

Government responded

Conclusions & Recommendations

23 items (5 recs)

Source

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Government Response

AI assessment · 23 of 23 classified

Accepted 1

Accepted in Part 1

Acknowledged 15

Deferred 1

Not Addressed 2

Rejected 3

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Fourteenth report from Session 2022-23 · published 14 Oct 2022

Read the government response ↗ Response on the Index

Recommendations & Conclusions

1 item

5 Recommendation Accepted

Seven years after the Pensions Schemes Act, regulated bodies are still not clear on the...

Recommendation

Seven years after the Pensions Schemes Act, regulated bodies are still not clear on the Financial Conduct Authority’s expectations for consumer protection. The 2015 Pensions Schemes Act provided consumers with greater flexibility for Investigation into the British Steel Pension Scheme … Read more Seven years after the Pensions Schemes Act, regulated bodies are still not clear on the Financial Conduct Authority’s expectations for consumer protection. The 2015 Pensions Schemes Act provided consumers with greater flexibility for Investigation into the British Steel Pension Scheme 7 accessing their pension savings and allowed DB pension scheme members the opportunity to transfer out to a DC scheme to access their savings. The FCA recognised the potential harm these reforms could cause some consumers and was concerned with the speed at which they were introduced. In response, the FCA provided guidance that advisers should assume that, in most cases, a transfer will be unsuitable, creating confusion among advice firms. Adding to this confusion, the FCA consulted on removing its starting position in 2017, despite finding a 17% unsuitability rate for DB transfer advice across the market. Such contradictions and misalignment between the legislation and regulation of transfer advice contributed to the failings of advisers within the BSPS case. There are also uncertainties around the provision of Professional Indemnity Insurance (PII), as the availability of cover has become constrained by limited providers and high costs. The FCA is yet to define its expectations for the PII industry or fully consider its effects on the stability of pension transfer advice market. The FCA has also failed to clarify its regulatory approach to other areas emerging areas of consumer risk, such as crypto asset investments. Recommendation: The FCA should be more proactive and consumer-focused in its engagement with stakeholders. It should have a better mechanism for responding to consumer harms and collect more evidence on a regular basis to pick up on issues that are being raised, especially from emerging risks in financial markets. The FCA must also review how effective the Financial Services Consumer Panel is at consumer protection and how it influences policy debates within the FCA fro Show less

Government Response Summary

The FCA agrees with the Committee’s recommendation to be more proactive and consumer-focused in its engagement with stakeholders. The FCA’s Business Plan sets out its commitments for tackling conduct that can cause serious harm and how the organization is joining up its tools to act efficiently, effectively, and consistently. On BSPS, working in partnership with the FOS and the FSCS, the FCA has engaged extensively with former BSPS members over a significant period of time.

HM Treasury

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