Following the British Steel Pension Scheme scandal, members are now making complaints regarding their pension transfers. Many members found themselves with limited options when transferring their funds. They were preyed upon by financial advisers, resulting in financial mis-selling.
British Steel pension transfers
Following the Tata Steel merger, the British Steel Pension Scheme’s 130,000 members had to make a decision to make about their pension pot. Members were given three options when making their pension transfers. The options were:
- Remaining in the current scheme. This was transferred to the Pension Protection Fund in March 2018.
- Move to BSPS2 – the new British Steel Pension Scheme
- Transfer into a private pension
Members were unhappy with the limited options on offer. The first two pension transfers saw members with less benefits than the previous scheme. However, the third option of selecting a private pension has proved to be the most unsuitable.
Unsuitable pension transfers
With limited financial knowledge, members were left with huge decision on their hands. This left them open to mis-selling from financial advisors. Firms and their advisors were described as “vultures” as they looked to take on the pension pots of scheme members.
However, many members have now complained to the Financial Conduct Authority (FCA) over mis-selling. Those who entrusted advisors with their pension pot found their funds were invested in unsuitable schemes.
The level of risk involved was much higher than they were aware of, along with the fees involved. 17 firms are now being investigated by the FCA over financial mis-selling to British Steel workers.
In most cases, recommended pension transfers by advisors are deemed unsuitable by the FCA. This has led to a crackdown in which the FCA recently updated its policies. This forced many UK pensions specialists to temporarily suspend their transfers.
Were you were given poor advice when transferring into a SIPP? You may have been a victim of mis-selling. Contact our expert team today to discuss your claim. We offer a no win, no fee service. Support will be free until we have successfully claimed your compensation.