FSCS tops up steelworker payouts by £80,000 after recalculation

Hannah Godfrey reports...

The Financial Services Compensation Scheme (FSCS) has topped up the compensation payouts of five steelworkers, adding a total of £80,000 to their claims.

The lifeboat fund has issued an update about its compensation decision for British Steel Pension Scheme (BSPS) members affected by the failure of adviser firm Active Wealth UK, which was found to have wrongly advised them on pension transfers.

As a result of its recalculation of the compensation, the lifeboat fund topped up five claimants, including one customer who had previously received no compensation, with an additional £80,000.

Just 11 of the 77 Active Wealth clients who put in claims to the FSCS suffered no loss and so were not entitled to any compensation. The FSCS said there was five remaining cases to be completed, which were likely to be decided soon.

Outgoing FSCS CEO Mark Neale (pictured) said: “We know that there are other BSPS members who may be entitled to make a claim but have yet to come forward. I urge [them] to make a claim direct with FSCS at no cost, via our website or contact us for more information.”

Westminster meeting

In November 2018, the lifeboat fund said it would “look afresh” at some aspects of the redress calculation method it applied to British Steel workers following a meeting in parliament.

A group of steelworkers, along with their legal representative, Clarke Willmott solicitor Philippa Hann, and CHIVE advisers Echelon Wealthcare’s Alastair Rush and Wingate Financial Planning’s Alistair Cunningham, visited Westminster to meet with regulators and MPs to discuss the compensation they were to receive from the FSCS.

The discount rate used by the lifeboat scheme to calculate compensation, the lack of recognition of advice fees paid by the steelworkers, and the FSCS’s take on the value of the workers’ pension pots were the main areas of concern to the steelworkers and their representatives.

Hann had previously suggested the way the FSCS calculates redress forced undue risk onto their shoulders. Rush, meanwhile, told Professional Adviser – RP’s sister title at the time that the lifeboat scheme would look at the advice charges levied on the steelworkers and the discount rate used to calculate redress.