Four British Steel firms expected to fail, says FSCS

The FSCS paid out this compensation to members as of 25 January. Last year the lifeboat scheme completed 543 cases, with 490 receiving compensation. In 2019, this was 84 claims, with 73 receiving compensation, and in 2020, this was 36 and 25 with compensation.

Caroline Rainbird, chief executive of the FSCS, said it was important to note the time taken to process a claim often depended on third-parties providing details to the FSCS – including the administrators of the failed firm or other parties holding customer information, as well as from those firms acting on behalf of customers.

“This can slow the process down as third-parties might not respond in a timely manner or it might take time to track down who is responsible for providing the information in the first place,” she said. “This means that we sometimes cannot turn around the claim as quickly as we are otherwise able to do.”

Rainbird said there are currently four British steel firms expected to fail in the coming weeks which were on the FSCS’s watchlist and were known to have advised on BSPS transfers, and that the scheme had written twice to all those it believes might have been subject to mis-selling.

“We will continue to see if there are other opportunities to reach out to steelworkers, including working with local MPs, industry representatives, and engaging at a local level in the community – with events such as the ‘boots on the ground’ in Swansea and Scunthorpe, social media, tailored documents, and other means,” Rainbird said.

The FSCS said where possible and in relation to steelworkers who were advised by failed firms, it works closely with insolvency practitioners to take on client information from failed firms.