British Steel pension scandal: Savers could be compensated

British Steel pension savers are to be compensated if they were poorly advised to switch their pension pots.

The Financial Conduct Authority (FCA) said it would deliver compensation worth £71.2m to those who were misled.

Most of these took advice from a financial adviser in the process, with these advisers regulated by the FCA.

The regulator said that close to half - 46% - of all the advice it had reviewed turned out to be unsuitable.

Advisers will now be forced to pay compensation to those who received unsuitable advice and switched away.

If the advisers have since gone out of business, the Financial Services Compensation Scheme will step in, with payments expected to start from the end of 2023.

Sheldon Mills, executive director for consumers and competition at the FCA, said: "The circumstances around British Steel Pension Scheme transfers were exceptional, with former members receiving significantly higher levels of unsuitable advice compared with other cases.

"We want individuals who lost out financially after receiving unsuitable advice to receive compensation through our scheme."

In a letter sent to advisers on Thursday, the FCA said: "Under the proposed redress scheme, firms which advised on British Steel Pension Scheme transfers would be required to review their advice.

"If the advice is unsuitable and resulted in a financial loss for former British Steel Pension Scheme members, the firms would be required to provide compensation."

It added that "failing to act on the requests in this letter" could allow the FCA to take action against the adviser.