The threat to mis-sold steelworkers
Fueled by a self-reference sense of injustice , certain advisers owing redress to clients they have mis-advised to transfer out of the British Steel Pension Scheme are now making their victims pay twice by harassing them into settlement of claims.
While this behaviour is reported in the trade press, its consequences aren’t. This blog looks at what support impacted steelworkers are getting and it focuses on the work of a small group led by Al Rush and Rich Caddy, who are maintaining the morale of those for whom the BSPS redress scheme has been created.
Support for these steelworkers
This is the new year’s message that Al Rush who is providing practical advice to steelworkers from his base in Port Talbot, is giving to members of the British Steel Pension Transfers Facebook Group.
Some of you may know that the British Steel Action Group has started legal proceedings against the FCA with a view to getting the BSPS redress scheme cancelled. The redress scheme itself is nothing more than an administrative overlay over existing￼ compensation procedures for anybody who has been mis-sold a pension transfer.
The legal challenge to the redress scheme by the British Steel Action Group is bringing more uncertainty to steelworkers . It is prolonging the proceedings and has no regard to the financial and emotional well-being of BSAG’s clients – the steelworkers.
This means that even if the redress scheme does not go ahead, you are still able to complain under the pre-existing protocol. The redress scheme simply compelled a particular course of action in instigating the possibility of a claim or redress. It does not in itself, cancel or reduce your ability to make a claim or a complaint. However, some of you may be in the position whereby if you delay submitting a complaint, then you might find yourself out of time and be unable to have your complaint adjudicated. ￼
The threat of being “time out” is now very real, many steelworkers transferred out of BSPS in 2016 and are now facing the 6 year claim limitation
It is not my place to tell you to complain or make a claim. I am not authorised or regulated to do so. However, I would say this. If you are minded anyway to do so, you should carefully consider not waiting any further before you submit your claim or￼ complaint. Further, you do not need to have legal advice in order to prosecute a complaint. However, with the situation being as dynamic and as fluid as it is at the moment, I would strongly suggest that you consider having a conversation about this with somebody who knows what this business is all about, or a professional who is authorised and regulated to prosecute a claim on your behalf
Left to fend for themselves, many steelworkers have made the wrong decisions, and many more will do so, as they are worn down by a system that seems set against them.
Many advisers are currently writing to steel workers offering minimal or nominal amount of compensation. So, whatever you do, do not rely solely on a conversation that you once heard in the mess at work before you decide what to do.
But steelworkers who claim to the Financial Ombudsman get no help at all. To quote former steel man Rich Caddy
The problem is.. FOS do not check calculations but instead send you what ever offer the firm has made (usually a manufactured figure) FOS who declare you do not need advice when making a complaint then suggest you should take advice on the validity of the offer. The same goes for taking professional legal advice, they present options such as the member paying between £1k – £2k for a redress calculation without offering the advice that is so needed. Presenting options is a far cry from providing advice.
How advisers are seeking to gain advantage
Advisers have learned how to game the redress system to manage down the claims which they are required to assess. The most obvious tactic used by advisers to diminish claims is the selective use of the very volatile gilt yield to massage down compensation claims.
There were periods in 2022 when compensation could be managed virtually to zero simply by exploiting spikes in the gilt yield
Finding another spike in gilt yields will be all too easy in 2023, those owing redress can calculate the redress they pay when the markets suit them.
Even with the long dated yield now at 3.5%, the FCA estimate that average compensation falls from £60,000 to £45,000, but given the latitude advisors have to determine the date when they value the loss to steelworkers, any future spikes could be used to determine redress is slim to non-existent.
Al Rush has explained the stupidity of this very well in this analogy.
Imagine an employer determining the amount it pays month by month into a defined contribution pension according the likely annuity that contribution would buy in 20 years time.
The FCA has further work to do to bring order to this disorderly market, the alternative is further pain for the victims while the perpetrators of ill-advice continue to benefit from it.
A depressingly litigious landscape
For now, it is litigation, not compensation that dominates the conversation.
Everyone’s circumstances and situations are unique and completely different, and what applies to your mate at work will probably not apply to you. If your IFA contacts you, whatever you do, seek and take further advice from somebody or an organisation that you know and trust before you decide on a course of action.
Somewhere in this protracted process, the idea behind “treating customers fairly” got forgotten. If there is a “consumer duty”, how is it being displayed here?
Put bluntly, your transferring adviser will probably have paid for expensive legal advice before sending you that letter. You will be like a lamb to the slaughter if you simply take it at face value without carefully considering all your options first so that you can make an informed, measured and reflective decision that is going to be in *your* best interests.
Any good adviser reading the following paragraph will be shocked that these words have to be spoken.
You are going to get one chance to get this right. This has been going on now since 2017, and I know that many of you are weary of it and pissed off. But that’s what they want. They want to wear you down and diminish and undermine your will to fight. So, maintain your controlled aggression, your sense of outrage and anger, and your resolve. And do not fuck it up right at the very end and possibly sign away what is rightfully yours simply because you could not be arsed to go the extra mile by asking somebody else for help.
Will there be light at the end of this long tunnel?
I will continue to write about this as the year progresses. There are many minor injustices that are being righted by Caddy and Rush, with the help of expert opinion. I will report on them as well. But for the most part, I want to talk about ways to make this redress better and here I may have good news.
The harassment must stop and redress must begin – but only proper redress. We have to trust the regulator and consumer protection and we have to enforce the consumer duty.