Thousands of UK steelworkers victims of pension regulation scandal, says NAO
Thousands of steelworkers were the victims of pension regulation failures that left some with losses of up to £489,000, an official report has found, prompting accusations that the UK financial watchdog was “asleep at the wheel”.
The National Audit Office’s findings relate to a 2017 scandal involving members of the British Steel pension scheme, many of whom were persuaded to transfer their retirement savings by advisers who then pocketed huge fees.
The NAO, the government’s public spending watchdog, said some of those who transferred the cash to a different provider “have suffered significant financial losses because they were provided with unsuitable advice … and they have not been compensated fully”.
It said “the regulated financial advice market failed to protect them”. The Financial Conduct Authority was, and still is, the relevant watchdog.
That prompted Dame Meg Hillier, chair of the public accounts committee, to say the case “was a failure from top to bottom … The FCA, whose job it is to regulate these firms, was asleep at the wheel”.
The FCA has come under fire in the recent past over its mishandling of an another investment scandal involving London Capital & Finance, a firm that collapsed in 2019, leaving many individuals nursing big losses.
The British Steel pension plan was a large “defined benefit” scheme with about 130,000 members which was restructured in 2017 after British Steel’s then-owner Tata Steel experienced financial difficulties.
At the time, members typically had to decide between two options for managing their pension benefits, though about 44,000 members – typically non-pensioners more than a year away from retirement age – also had a third option: they could “transfer out”, which meant taking their
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