Justice for most mis-sold steelworkers is still over the horizon

In his/her own words, here is a complaint from a steelworker dealing with the Financial Ombudsman.

Hope someone corrects me with the below but my take on my ‘agreed mis selling’ pension redress status ends with…
Me asking for sight of the redress calculator 3 times from the Ombudsman only for their response to be a resounding ‘no’. How can anyone be expected to sign to accept a final decision from the Ombudsman (preventing any future court action – their words on the acceptance slip) for redress using a calculation that you cannot have visibilty of.
If you refused the FOS calculation and went to court- they would no doubt side with the FOS (their the Ombudsman after all) that the redress is fair (though you cant have access to it) and you would recieve nothing.
Once again the financial industry including the Ombudsman are looking after each other to the very end.
How coincidental that the markets / factors for the (fair) calculation are currently leaned towards the advisors who missold us advice on a grand scale for their own profits ( and are now very active in wanting to close the claims off by encouraging you to sign up to the FOS redress )and are then excused from paying redress (in the majority of cases) by using this ‘fair’ calculator. If you are awaiting a decision currently from the Ombudsman i ( and my genuine FA ) would recommend the longer the decision is delayed the better your chance for redress – but good luck with that – from what i have found.
Will update this post with my final redress calculation – and am not a betting man (though according to my FA at the time i was a high risk taker?) – but I’ll bet my redress is close to zero if anyone wants to take a friendly wager 😀.
Had the pleasure of telling the (misselling) FA what i thought of him though today – and that made my day if nothing else.

The steelworkers are being gamed again. Originally they were gamed out of their defined benefit pensions by talk from regulated advisers that transferring was a “no-brainer” , that otherwise they had Hobson’s choice between the PPF and a Tata sponsored BSPS2.

They received cash equivalent transfer values which were reduced to take account of the deficit on the scheme at the time and their money was typically invested in ways that would today fail the consumer duty.

In recognition of the failure of regulators to protect them, a retrospective redress scheme was set up by the FSCS. It has taken so long to arrive that steelworkers now find that the redress they had been promised, is not the redress they will get.

Savers who were advised to transfer a defined benefit (DB) pension are now due around two-thirds less compensation compared to the start of 2022 thanks to “soaring” annuity rates, according to analysis from OAC.

OAC’s DB Redress Tracker, which is based on an example saver who left their scheme in 2018 aged 50, with a pension of £10,000 p.a. receiving inflation-linked increases, showed that a transferor making a compensation claim in January 2022 could have been entitled to around £160,000.

However, that slipped to £50,000 as of July 2023, suggesting that that many people who were previously advised to transfer out of their DB pension are likely to be due significantly less compensation.

OAC explained that redress has typically ranged between £100,000 and £150,000 since 2018, as supressed annuity rates minimised the replacement income that transferors could have secured had they sought redress in the period to 2022.

“Soaring” annuity rates over the past 18 months, however, mean that many transferors will now be projected to be able to secure a historically high level of guaranteed income from their remaining pension pot.

According to the firm, this will minimise the financial disadvantage for those who are seeking compensation after being poorly advised to transfer their pension, and therefore the compensation they are due.

OAC head of redress solutions, Brian Nimmo, commented: “DB pensions offer huge security and peace of mind through retirement. The compensation process is in place to help retirees who suffered from poor advice that led to the loss of this guaranteed income throughout retirement.

“However, over the past 18 months we have seen a shift in the market whereby the rapid rise in projected annuity rates has meant people who did transfer out are now assumed to be able to secure far higher levels of guaranteed income.

“It mitigates the financial damage suffered by many DB transferors and means that they could be due significantly less compensation if they were to bring their case for compensation now.”

Steelworkers were also promised the FCA would research and if available promote a redress scheme which would allow steelworkers to return to an occupational scheme (rather than an annuity) with certain benefits that the steelworkers might prefer.

My understanding is that such a scheme is now available and awaits the validation of the various Governmental bodies involved.


The loss that the steelworkers have faced cannot be quantified by comparing defined benefits foregone relative to annuities that might be purchased. The loss has to be considered by the disruption to their lives , the cost of employing advisers, making claims, and paying claims companies fees.

It is also the human cost to steelworkers and their families from having to go through 6 years of uncertainty about what has been and will be done to their long-term retirement finances.

The whole mess resulted from a flawed decision to intervene in a process that if followed, would have seen members benefits protected from scamming by PPF assessment. The RAA put in place under the oversite of the Pensions Regulator left deferred pensioners vulnerable to scamming by making them responsible for choices they could not reasonably be expected to make.

The BSPS saga has involved one regulatory failure after another. The latest regulatory failure is brilliantly described by the steelworker who is not allowed to see the working of FOS in handing down his/her compensation. How ignominious is that?

Is it any wonder he/she concludes

Once again the financial industry including the Ombudsman are looking after each other to the very end.

It is time to rethink what is going on and pay compensation , not just for financial loss but for the regulatory failure and the damage it has done to steelworkers lives.

Compensation should not be granted at a point determined to advantage the adviser. It should be determined by the damage caused by the transfer and calculated using annuity rates at the point of sale.

A restitution scheme – if available – should be fast-tracked through so it can be offered to steelworkers who want another choice than SIPP or annuity.

FOS should be transparent in its dealings with steelworkers and share all calculations used in reaching a compensation figure.

Steelworkers should be treated fairly, as fairly as they would had the mis-selling happened when the Consumer Duty was in force.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to Justice for most mis-sold steelworkers is still over the horizon

  1. Rob Reid says:

    The purpose of compensation where a solution is unsuitable is to put some back in the position they were in before they were misadvised. Hence deffered annuity is the appropriate solution. If they have used the pcls then the annuity should reflect the post pcls pension based on the pcls they received. But thats just the financial
    side of their claim there needs to be a payment for all of the upset caused hard to assess to a fixed compensation is needed
    We have to avoid overcompensation.
    Also one of the guilty parties is the providers who received the CETVs given the volume and them knowing Option 2 was unlnnown at the time of transfer they should unwind the plans and make the funds gross of adviser charge paid over to the deferred annuity provider

  2. Stuart Fowler says:

    Rob is right. The only technical issue with the redress calculation is the assumed rate of return pre retirement. Reference to current interest rates for the conversion of pot to pension is indisputable. The FCA dealt with objections to the use of low real return from a low-risk but at-risk portfolio pre retirement in its consultations. So low, incidentally, as to diminish the significance of this decision. It did not rely on access to deferred annuities being impractical – though I think it could have. It rather took a view that it feared overcompensating claimants. The only basis for that is if it thought it was not proportional. That only makes sense if it felt there was normally room for some doubt about the advice – in other words transfer was unlikely to be wholly and indisputably without merit. Which in most cases must hold, utility assessment normally being a grey area. This is what debate on redress should focus on.

  3. Eugen N says:

    Henry, they cannot have it both ways. I have told a few to discuss reintegrating within the BSPS (old scheme), this could have been addressed by Parliament. The advisor would have paid the difference to reintegrate the member.

    However, many steelworkers enjoyed the flexibility, but also want compensation for miss-selling. You cannot have your cake and eat it!

  4. Carl masterman says:

    As a steelworker I would like to point out that we were given a matter of weeks to make a decision on a subject we didn’t know anything about so went to relevant experts and spoke to them at that point greed took over nothing was known or explained about ppf or bsps2 it was all guess work and now we are getting robbed by the government backing the financial industry the compensation should be worked out at the point of transfer as that is the time they mid sold us our pensions and the decision they made and said was the best option but what do I know I’m just a steelworker

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