Lawyers working with the former members of the British Steel Pension Scheme (BSPS) say the coronavirus has further exacerbated the plight of the workers, many of whom were wrongly advised to transfer out of the scheme.
Markets have fallen dramatically as a result of the coronavirus crisis, with UK shares losing over 30% of their value. Pension investors generally have diversified funds, so most will not have seen their investments fall in value by quite that much, but lawyers at national firm Clarke Willmott LLP say it is a powerful reminder of the value of final salary and other defined benefit (DB) pension schemes.
Stephen Searle, who has been fighting for the workers said:
“The former members of the BSPS who were advised to transfer out rather than move into the new scheme (BSPS2) or indeed the Pension Protection Fund (PPF), which both provided ongoing guarantees, will be feeling the sting now more than ever.
“Many received unsuitable advice to opt out of a risk-free environment. In addition, those still working for Tata Steel will have seen the value of their Aviva personal retirement savings plans plummet.
“Those who transferred funds out, may now have a personal pension plan. In a personal pension plan, they will be entirely responsible for investing the fund and will bear all the investment risk. Financial advisers can advise, and investment decisions can be delegated to a fund manager, but involving them has a cost. This must be offset by slightly higher returns – and the member still bears the risk.”
The scandal came about after members of the British Steel Pension Scheme were asked to decide what to do with their pensions as part of a restructuring process in 2017. Around 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.
Clarke Willmott represents hundreds of British Steel workers in Port Talbot, Scunthorpe and Teesside, claiming compensation to try to rebuild their retirement savings.
“No-one can predict exactly what will happen in the world, or what the effects of it might be on investment returns. Coronavirus is just one of many ‘unforeseeable’ events that could have come along at this point to derail these members’ journey towards retirement.
“One thing is certain: if their goal was a pension fund of a certain size by the time they came to retire, they are now much further away from it. No-one knows how long the markets will take to recover.”
For those members affected, Stephen suggests taking advice from a regulated financial adviser and seeking advice on a possible claim for compensation, ensuring that any claim made is within the legal time limits.
Stephen and his team are acting against 60 different firms on this matter so are well-placed to advise whether people have a good claim. The team is running free initial consultations and can act on a no-win no-fee basis.
Clarke Willmott has seven offices across the country in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.