NAO to investigate FCA’s handling of British Steel pension transfer scandal

The National Audit Office (NAO) has announced that it will be conducting an investigation in spring 2022 into the Financial Conduct Authority’s (FCA) handling of the British Steel Pension Scheme (BSPS) transfer scandal.

Specifically, the NAO’s investigation will set out the activities the FCA has undertaken to regulate financial advice in the BSPS case, its plans for supporting steelworkers who may be entitled to redress, and the extent to which compensation is being delivered.

Following the BSPS’s separation from Tata Steel UK in 2017, members were given several alternative pension options, including transferring their savings out of the scheme.

Around 7,700 members decided to transfer out a total of approximately £2.8bn worth of funds, with many receiving independent financial advice to inform their decisions.

However, the FCA subsequently found that nearly half (47 per cent) of the advice given to former BSPS members was unsuitable.

A further 32 per cent of advice given contained ‘information gaps’, while just 21 per cent was deemed suitable.

An FCA spokesperson commented: “We look forward to working with the NAO. We’ve introduced new rules to raise the standard of pension transfer advice and we’re taking action, both with individual firms and across the sector, to ensure that where consumers lost out because of unsuitable advice they receive compensation.

"We are encouraging former members of the BSPS to consider whether they should make a complaint about the advice they received, as they may be entitled to compensation.”

Earlier this week, the FCA revealed that it had written to 3,591 defined benefit (DB) pension transfer advice customers over the past year to outline how they can make a claim to the Financial Services Compensation Scheme.

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