Watchdog clamps down in steelworker pensions advice row

The City watchdog has banned businesses which wrongly advised steelworkers on their pensions from selling assets to avoid paying compensation.

The Financial Conduct Authority (FCA) has sanctioned firms that advised British Steel Pension Scheme (BSPS) members between May 2016 and March 2018.

Around 8,000 staff transferred £2.8billion from the BSPS when it was restructured in 2017.

Virtually all of those who switched – or 95 per cent – used financial advisers, according to the National Audit Office.

The FCA said almost half of the guidance the workers received was ‘unsuitable’.

And it has now used emergency powers without consultation over fears firms could dump assets to avoid paying compensation.

Former BSPS members could be in line for a £71.2million payout from late 2023 following proposals announced by the City watchdog last month.

Sheldon Mills, executive director of consumers and competition at the FCA, said: ‘Firms who gave poor advice to British steelworkers must ensure that they retain assets and funds to pay redress under our proposed scheme.

‘We will act swiftly if the rules aren’t being followed.’