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Regulator accused of failing British steel pension members

Getty Images Tata Steel in Port TalbotGetty Images
Nearly eight thousand steelworkers, including many from Wales, lost an average of £82,600.

A financial regulator has been accused of failing members of the British Steel Pension Scheme and causing them serious financial harm.

A report by the Commons Public Accounts Committee found the Financial Conduct Authority (FCA) did not protect members from unscrupulous financial advisers.

Nearly 8,000 steelworkers, including many from Wales, lost an average of £82,600.

The FCA said it would consider the report.

New pension rules in 2015 allowed members to transfer out of the scheme.

The report said the FCA failed to take preventative action to protect them against unsuitable advice.

Many have not been compensated fully and the report urges the FCA to speed that process up.

The report is also critical of the regulator's approach to enforcement, with only one fine issued so far.

The organisation, it said, was too focused on gathering evidence and issuing letters to firms, rather than enforcing against non-compliance.

Getty Images Port Talbot steel workersGetty Images
Many steelworkers have not been compensated.

Blaenau Gwent MP Nick Smith, who is lead member on the committee's inquiry said: "Steelworker pensioners came to me four years ago telling me they had been ripped off.

"This report shows how badly they were treated and where the FCA failed to report them in their hour of need.

"The FCA failed to get a grip on this scandal at the outset, was slow to respond and not nearly enough has been done to hold those responsible to account."

The committee is now asking the FCA what it has done to prevent something similar happening in the future.

It has also asked for a progress update on the FCA's 30 active enforcement cases.

A spokesman for the FCA said: "The circumstances around British Steel Pension Scheme transfers were exceptional, and we know that many members lost out due to poor advice. We will carefully consider the recommendations of the report and respond to the committee.

"We've proposed a scheme which should see advice firms pay over £70m of compensation to steelworkers. That's in addition to over £70m which has already been paid out, and people affected don't have to wait for the scheme to be in place to make a complaint.

"We've also made sure that only firms with the right skills and experience can provide advice on pension transfers in future".