As Your Money reported earlier this month, Lloyds officially applied to the Prudential Regulation Authority for permission to terminate bonds held by an estimated 100,000 savers, having announced their intention to do so last December.

The move has been subject to a struggle between savers and the bank, with affected customers attempting to block the move through official channels.

Lloyds’ is moving to accelerate the cancellation process. If successful, investors will not only lose their income from the shares, but may also incur a capital loss, as the current terms of the cancellation plan would mean returned investments would not be adjusted for inflation. The bonds were originally forecasted to mature in the middle of the next decade.

Today, however, the FCA has made clear that it will not take a formal role in assessing Lloyds’ actions. Approving Lloyds’ application is now the sole responsibility of the Prudential Regulation Authority (PRA) – and the PRA’s remit does not extend to consideration of the ‘fairness’ of Lloyds’ activities.

The campaign by affected customers to block cancellation is supported in certain quarters; leading the fight is Mark Taber, of fixedincomeinvestments.org.uk. He believes that the FCA should intervene in the fracas.

“A large number of bond holders are very elderly and vulnerable and rely on the interest for a material proportion of their living and care home costs,” Taber said in a blog post. “Lloyds’ proposed action would cause them hardship, which the FCA must act to avoid.”

“If not prepared to use intervention powers to act now to protect these vulnerable consumers, then an independent review of the FCA’s actions is required. This could be done through the Complaints Commissioner or through FCA’s complaints process, and I am prepared to make such a submission on behalf of affected consumers.”