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Clarke Willmott solicitors delighted the FCA wrote to British Steel workers about pension transfers

Clarke Willmott solicitors, alongside Al Rush, campaigned for over two years to raise awareness of the British Steel Pension Scheme (BSPS) scandal and ensure that steelworkers are properly compensated. In 2019 we met with the FCA and asked them to write to the near 8,000 steelworkers who were advised to transfer out of the BSPS and into personal pensions. We are delighted that the FCA decided to take this step.

When the BSPS scheme was set to close, instead of opting for the replacement final salary scheme, BSPS 2, or the Pension Protection Fund (PPF), thousands of steelworkers relied on advice that transferring into a personal pension was best for them. Our solicitors have met hundreds of steelworkers and have seen hundreds of advisers’ files and we think that advice was almost always wrong. We were pleased to see clear statements from the FCA that they drew the same conclusion.

100% success in British Steel Pension mis-selling claims

We offer expert legal advice to steelworkers who transferred out, and assist those who want their complaints assessed and handled by expert financial services solicitors. We have a 100% success rate for our clients who have incurred losses as a result of transferring and have recovered £2.4m in compensation for steelworkers so far. We have been able to increase the compensation that our clients would have received without our assistance by hundreds of thousands of pounds, because we fight for our clients to be properly compensated.

What does bad pension transfer advice look like?

The FCA has a very useful “advice checker” to help people think about whether they might have been mis-advised. It encourages individuals to think about, for example, whether their adviser properly explored their personal circumstances and plans for retirement. Also, if their adviser explained the difference between DB and DC schemes so that the steelworker could understand what they were giving up.

The FCA also asks individuals to consider whether their adviser considered whether they could have achieved what they wanted by staying in, or indeed, for BSPS members, by going into the PPF or BSPS 2.

The FCAs findings reflect exactly what we have seen in advisers’ files. Frequently, advisers ‘implant’ objectives and focus on flexibility and control, maximising death benefits, early retirement and securing a larger tax-free lump sum as reasons to transfer. These are not good reasons to transfer into a personal pension. In reality, most steelworkers our solicitors have met were panicked by changes to their pension scheme, worried by rumours, and simply wanted to keep their pensions safe, have a steady income in retirement and peace of mind. Transferring into a personal pension was arguably the best way not to achieve those objectives.

Some advisers preyed on steelworkers’ fears

We continue to be shocked by the conduct of advisers who are often described as having engaged in a ‘feeding frenzy’ when it came to BSPS. We routinely see firms which transferred large numbers of steelworkers into personal pensions after 30 minute meetings, and very commonly there was no discussion at all of retirement plans, and no discussion of the alternative, highly valuable, options of BSPS 2 or the PPF.

Instead, some advisers preyed on steelworkers’ fears concerning the safety of their pensions and exploited them, seemingly for their own financial gain. Certain advisers told steelworkers they could not retire until 65 if they went into the PPF, knowing that the prospect of working until 65 was frankly heart-breaking for those who had been breaking their backs for 30+ years already. Others told their clients, when they received letters about their transfer values increasing, that it was a ‘smoke screen’ and that the trustees were trying to get them to stay in so that the steelworker ended up in the PPF. We have seen templated advice used, often with other clients’ details left in them. We have also heard reports of advisers now discouraging their clients from making complaints, some going so far as to threaten totally baseless defamation proceedings against those they advised to transfer.

What are the consequences for steelworkers?

In the Guidance Consultation GC20/1 the FCA says “Between April 2015 and September 2018, our data shows that 234,951 DB scheme members, with an average transfer value of £352,303, received advice on whether to transfer out of a DB scheme. Across the market, 69% of this advised population were advised to transfer. Given that many consumers are unlikely to benefit from a transfer, this headline figure is surprisingly high and suggests there may be consumer harm. The impact of unsuitable advice on consumers is significant. Having lost the security of a guaranteed income, consumers bear the risk of how their pension investments will perform and whether the pension will provide the income they need for their remaining lifetime. They also become responsible for paying charges that, for many, will be one of their largest monthly expenses. These charges are not obvious to many consumers because they are deducted from their pension investments.”

We would go further than to say the impact on those who transferred is “significant”. Our clients have suffered losses ranging from £30,000 to over £1m and we’re fighting hard to see that those individuals secure the maximum compensation possible by exploring all avenues, including court proceedings where appropriate.

Many steelworkers are still unaware that they might well have been mis-advised. Prior to the COVID-19 outbreak, steelworkers’ pensions might have been holding their value or may have seen some growth. However, the loss suffered is a future loss that will be felt in retirement. We are yet to see a file where an adviser clearly pointed out the level of fund required at the point of retirement to match the BSPS benefits or how, on a realistic basis, after charges and inflation, the steelworker was ever to going to achieve that. In most cases we have seen, the steelworker’s fund would need to double or treble, but because most steelworkers are unwilling to take risk (another reason that they shouldn’t have been advised to transfer), most will be in cautious investments not achieving high enough returns. Some might even lose money over time as opposed to achieving any returns at all.

No need for a Claims Management Company

We welcome the FCA’s clarification that individuals do not need a Claims Management Company (CMC) to help them with a complaint to the Financial Ombudsman Service. It’s an important warning. We are aware that certain CMCs are charging as much as 48% of their compensation – this could be up to £76,800 of a steelworkers’ compensation because the Financial Ombudsman can award up to £160,000.

Our solicitors have also seen some CMCs engaging in illegal practices and poorly managing complaints which is extremely concerning. As a result, we consider CMCs to be one of the biggest threats that steelworkers now face.

What to do next

The Financial Ombudsman Service offers a free and excellent service and representation is not a requirement. However, the Financial Ombudsman Service is not the only option available and there can be multiple potential ways to recover your losses. . We would recommend that you take expert legal advice from a reputable firm of solicitors who specialise in pension mis-selling as to your options as, for some, other avenues could result in higher compensation.

If you a unsure whether you were mis-advised about your pension transfer, or if you think a CMC has let you down, please feel free to call us on 0800 422 0221 or email


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