Fig leaf for stripped pensioners
The Government is extending help to all 125,000 people who lost part or all of their pension when their scheme was wound up between 1 January 1997 and 5 April 2005. The surprise Budget announcement will bring the second extension of the so-called Financial Assistance Scheme (FAS) and follows defeats in both the English and the European courts which made some improvement inevitable. The European Court in particular made it clear that the benefits of the FAS were inadequate. But it said they would have been adequate if the FAS had been as good as the Pension Protection Fund (PPF) – which steps in for funds which collapsed from 6 April 2005.
The changes announced on Budget Day will not bring the FAS up to the PPF level.
The new FAS will
But there will be no change to other aspects which limit the benefits paid
The revised Financial Assistance Scheme will still offer worse benefits than those provided by the Pension Protection for people whose scheme collapsed on 6 April 2005 or later. It will fall short in three main ways. The PPF provides a pension that is
Overall the changes will increase the cost of the Financial Assistance Scheme from £830 million to £1.9 billion in today’s money. But that cost is the total over the next 60 years. And the Chancellor followed the Government’s normal deceit of inflating these figures by using the totals over 60 years with inflation added on. On those figures the cost will rise from about £2 billion to £8 billion.
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