The National Audit Office, the UK’s independent public spending watchdog, is to investigate the FCA’s handling of the British Steel Pension Scheme restructuring.

The probe into pension transfers connected to the restructuring will be launched in Spring 2022 and will look at what went wrong.

The NAO says the investigation will set out the activities the FCA undertook to regulate financial advice in the BSPS case, its plans for supporting steelworkers who may be entitled to redress and the extent to which compensation is being delivered.

In 2017 the British Steel Pension Scheme (BSPS) was restructured and members were given a number of alternative pensions options. These included transferring their funds out of the pension scheme. 

The NAO said that about 7,700 members, many of whom received independent financial advice, took the option to transfer their pension to a different provider, representing about £2.8bn of funds.

A number of financial advisory firms targeted BSPS workers with many cases of unsuitable advice exposed by campaigners. A number of the advisory firms who gave advice to BSPS scheme members went bust.

In August, advisory firm A.W.Dallas Financial Services was forced into liquidation after receiving 35 Financial Ombudsman Service (FOS) complaints in relation to British Steel Pension Scheme (BSPS) pension transfer advice.

The FCA identified that many steelworkers received unsuitable advice and may have made, “poor financial choices and lost significant sums of money as a result.” 

The FCA has encouraged BSPS victims to "revisit" the advice they received and complain if they have concerns.