£400m fund boost for pensions lost by insolvencies

New proposals to create a £400 million fund to support workers who have lost their pensions have been unveiled today by Pensions Secretary, Andrew Smith.

An amendment to the Pensions Bill, which is currently going through the Commons, will establish a Fund with £400 million of public money to be paid in over 20 years with the possibility of further contributions from industry.

The Bill introduces a Pension Protection Fund (PPF) that will ensure workers get a decent pension even if their firm goes bust. But this is cover for the future, and cannot help those who have already lost out, the minister said.

The Minister said: "This will give real help to people who have lost their life savings through no fault of their own. I've met many of those affected and am convinced that taking action is the right thing to do - it will also be a huge boost to wider confidence in pensions."

As part of the process the Department for Work and Pensions is completing research into the extent of the problem and the numbers of those affected and will consult on how assistance will be delivered including any further legislative changes that are required.

Malcolm Wicks, the Pension Minister, added: "This vital measure will improve people's confidence in pensions and comes on top of other crucial steps we have already taken like the Pension Protection Fund, the simplification of the pensions tax regime and giving people clear individual information to help them take control of their own planning for retirement."

Details of the fund's operation will be worked out in consultation with stakeholders, and the government will review the operation of the fund in three years time.

(gmcg)