I am pleased that Jo Cumbo retains her passionate interest in what happened here.
A decade on and £106m in redress has now been offered to 1,870 former British Steel Pension Scheme (BSPS) members who were given unsuitable transfer advice.
The FCA has taken enforcement action against 20 firms and advisers involved in pension mis-selling to steelworkers. 2/2— Josephine Cumbo (@JosephineCumbo) April 2, 2026
Here is Jo in Port Talbot, the gentleman she is pictured with is no more.
There is a finite span of ageing steelworker’s lives. There is a scandal surrounding transfers and there is a scandal surrounding the Scheme’s inability to treat its members with respect.
What is missing for these Scunthorpe steelworkers was their increases on their pensions.This phot is ten years old but it was only a couple of days ago the door slammed shot on missing increases getting paid as the British Steel Pension Scheme was bought out by Legal and General.
Whichever way it’s looked at , the once mighty British Steel Pension Fund has progressed from might to misery in a decade.
It involves inept regulation from both TPR and FCA, a failure to use TPR to protect members when 85% of those who transferred should have stayed.
In August 2017, the Pensions Regulator agreed the key terms of a proposal from Tata Steel UK to restructure the BSPS through a Regulated Apportionment Arrangement. Such an arrangement allows a company to end its responsibility for a pension scheme, with the Pension Regulator’s approval, if continuing to support the scheme meant the company would inevitably become insolvent.
That involved the deeply troubling involvement of a former senior TPR executive in the establishment of the RAA. Had the RAA not have been pushed through , BSPS would have sat within the PPF until the capacity of Tata had become clear,
The RAA into BSPS 2 opened the door to the snake oil salesmen that the FCA had no control of , to do their worst. Steelworkers were asked to take decisions that they had no capacity to take. The questions that were asked of them – to choose between joining the PPF – going into BSPS or taking a transfer value paid into a personal pension, was way too hard.
The advisers who suggested that members would know what was best for them have never been called to account for appointing a corporate IFA to provide support, an IFA that has since been closed down itself
In short, the BSPS tale is a tale that needs a journalist as good as Josephine Cumbo to make sense of what happened and see the complex failures for more than the sensationalism of the “chicken and chips” sales tactics of the most notorious transfer salesmen.
Yes the subject would be helped by including facts.
Quantifying the amount of compensation provided by advisers
who have had no involvement with the 50% of cases finding their way to risky funds would identify the other victims who paid the price of this fiasco.
Had the funds chosen been prudent by how much would the 50% be reduced?
A comparison of the 50%+ appropriate advice with a member remaining in the fund might also bring balance to the article.
John, as you probably already know, you can piece together answers to some of your very reasonable questions by reading through various FCA reports, but it’s still not easy to get an overall picture.
Perhaps we need academics rather than journalists to write up the sorry history to learn lessons?
The FCA estimate 1,744 former members received unsuitable advice but were not offered a redress payment. This is because, even though they received unsuitable advice, they haven’t “lost out financially” as a result. Their defined contribution pots were still considered high enough to buy an equivalent annuity.
The FCA figures still do not account for all the estimated 7,700 steelworkers who transferred out of the BSPS after receiving advice. This is mainly because where an adviser firm failed, customers needed to make a claim to FSCS. Despite significant outreach, the FCA know some individuals have not yet made a claim.
Amount Recovered from Firms
Scheme Payments: Under the formal redress scheme, firms offered a total of £3.8m in direct redress to 187 members, while the FSCS offered £5m (173 members) for failed firms.
The FCA took enforcement action against more than 20 individuals and firms, resulting in payments and fines totalling £8.87m to the FSCS.
Since 2015, the FSCS has recovered over £290m from failed firms and third parties to reduce its levy on the industry, which includes funding related to BSPS claims.
11 firms became insolvent during the redress scheme process.
70% of unsuitable advice cases were determined to have no financial loss due to changed market conditions.
In May 2023, the FSCS reported that the final 2022/23 levy was confirmed at £625m, but the total compensation actually paid later to former BSPS members was lower than initially expected, allowing for FSCS surpluses to be carried over to future years and used to mitigate future levy increases.
The increased levy certainly placed a lot of pressure on compliant firms within the industry, requiring them to shoulder the costs of unsuitable advice given by other firms.
Feels to me a bit like the PPF raising levies from well-run DB schemes in years when it didn’t need to, contributing to a very large surplus today.
So compliant DB schemes helped to fund the PPF’s redress for backdated inflationary increases for members of failed DB schemes.
Was ever thus.
The continued focus on these outliers distracts from the vital work being done by the majority, and it’s time the conversation moved toward supporting the high standards we actually uphold
A Response to the Mischaracterisation of Independent Financial Advisers
What was the objective in regurgitating this biased, inaccurate slur against the majority of IFAs?
By revisiting this tired narrative, the article conveniently ignores the fact that it was the honest majority of the profession who ultimately footed the bill for the compensation of these pension scheme members. These are advisers who had absolutely no part in placing funds into unsuitable schemes, yet they continue to bear the financial and reputational brunt of actions taken by a tiny, opportunistic minority.
The “greedy group” involved in the British Steel pension scandal represented a failure of ethics, not a failure of the profession. To use their actions as a broad brush to smear an entire industry is not just lazy journalism—it’s a disservice to the thousands of practitioners who act with integrity every day.
The Reality of Professional Accountability
• The Funding Gap: It is a bitter irony that the very advisers being criticized are the ones whose levies fund the compensation for victims of the “rogue” minority.
• The Value of Advice: While the spotlight remains fixed on historical malpractice, the quiet work of persuading individuals to make sound, life-changing financial decisions goes unremarked.
• Conflating the Minority with the Majority: Highlighting the actions of a few bad actors within the steel industry as representative of the wider IFA community is a logical fallacy that undermines consumer trust in essential financial guidance.
Closing Thought
It is increasingly disheartening to defend a profession that does a great job of improving the financial lives of millions, only to be met with the same outdated generalizations. If we continue to punish the ethical majority for the sins of a long-gone minority, we risk alienating the very professionals the public needs most.