66,000 retirees face year-long wait for pension rise
Around 66,000 pensioners will have to wait an extra year for an inflation-linked increase to their compensation payments
Around 66,000 pensioners will have to wait an extra year for an inflation-linked increase to their compensation payments, it has emerged.
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More than 330,000 people receive payments through the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS), which support members of pension schemes that have collapsed.
Under plans announced in last year’s Budget, pensioners will receive inflation increases on compensation relating to pensions built up before 1997 - with rises capped at 2.5%.
The change is expected to benefit around 265,000 people from January 2027.
But the PPF has said a further 66,000 members will not receive their rise until January 2028 because of the complexity involved in calculating their Guaranteed Minimum Pension entitlement.
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Guaranteed Minimum Pensions were built up by workers whose employers had “contracted out” of part of the additional state pension in exchange for lower National Insurance contributions.
Campaigners said the delay would be devastating for pensioners who have already waited years for changes to the rules.
Maurice Alphandary, who leads the AEA Technology Pensions Campaign, said: “It’s disgusting. They’ve already agreed a course of action and now they’re backtracking.”
Terry Monk, from the Pensions Action Group, said some people were “dying waiting” for payments they believed they were owed.
The PPF said it had limited resources and was introducing the rises in phases to ensure payments were accurate.
A spokesman said: “Our priority is to implement payments from January 2027 for around 265,000 members whose schemes provided wider pre-1997 increases. This approach gives us the greatest confidence of delivering those payments accurately and on time.
“We will then complete the additional work required for around 66,000 members whose schemes provided increases only on post-1988 GMP benefits, with payments expected from January 2028.
“While we appreciate this will be disappointing for those members, we believe this phased approach is the most effective way to deliver these important changes successfully for everyone affected.”
A spokesman said: “Our priority is to implement payments from January 2027 for around 265,000 members.
“We will then complete the additional work required for around 66,000 members… with payments expected from January 2028.”
A Government spokesman said the reform was the biggest change to pension compensation in more than 20 years.
It said: “We are making the biggest change to pension compensation in over 20 years, benefiting over 250,000 PPF and FAS members.
"The vast majority of eligible members will receive these increases from January 2027, the earliest possible date.”