The Financial Ombudsman Service has revealed it has a 98 per cent uphold rate for British Steel complaints against firms who gave transfer advice.
In a letter to Nick Smith, MP for Blaenau Gwent, the FOS said its overall uphold rate for all BSPS cases was 63 per cent in favour of steelworkers, including complaints relating to administration or delays.
This compares with an overall uphold rate of 40 per cent for all cases (excluding PPI) in 2020-21.
However, its uphold rate for cases where the FOS considered the suitability of the advice to transfer was a lot higher at 98 per cent.
The FOS travelled to Swansea and Scunthorpe in September to December to hold one-on-one sessions with steelworkers. They were also joined by the FCA, FSCS and MoneyHelper.
The Ombudsman said since November, after these events were held, it had seen a significant increase in the number of BSPS complaints.
In an average month the FOS is used to receiving between 20 and 30 new complaints but it received 81 complaints in November, 64 in December and, despite the bank holidays and the festive period, it has already received 20 new complaints by January 17.
There would have been more cases but the FOS has passed several to the FSCS where the firms involved have since failed - 179 cases transferred so far.
As of the end of 2021, the FOS had resolved a total of 309 cases with a further 433 complaints either at first stage (investigation) or second stage (ombudsman stage).
The FOS also recognised there were timing issues for some steelworkers.
In its letter, it stated: “We are mindful that during the course of this year, for some steelworkers it will be six years from the point at which they transferred from the BSPS.
“As you know, a complaint should be brought to the Financial Ombudsman Service within six years of the event being complained about, or within three years of the date when the complainant ought reasonably to have been aware of their cause to complain (unless exceptional circumstances apply).
“We speak regularly to the FCA about this issue, and we continue to ensure we work these cases as a priority to mitigate the effects of these time limits, and the stress that this may cause to steelworkers.”
The letter comes in response to Smith’s letter in December raising concerns about how long it was taking for steelworkers’ complaints to be resolved.
Smith said: “This level of mis-selling is scandalous.”
He added: “I am pleased that more steelworkers are coming forward to complain to the Ombudsman and I urge those affected to support a redress scheme. Given the deadlines for some to complain is approaching, the FOS must work faster still to triage complaints so that justice for steelworkers is provided sooner rather than later.”
The City watchdog announced in December that it was consulting on a redress scheme which would be limited to BSPS transfer advice given between March 1, 2017 and March 31, 2018, and would ask firms to review their advice and, if found unsuitable, provide compensation.
The BSPS case
Three years ago British Steel Pension Scheme members were asked to decide whether to move their DB pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities, or to transfer out altogether.
As a result about 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the FCA that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The regulator said DB advice firm numbers have shrunk from 3,000 in 2018 to 1,200 now as a result of the regulatory crackdown.
NOTE: We claim no right or title to this article which appears in FT Adviser dot com. Author Amy Austin,
If you have been mis-sold your pension or advised to transfer your pension into a SIPP and lost part or all of your pension pot contact Claimline Legal today for a free review. Call 0800 779 7457 or go to www.claimlinelegal.co.uk