Majority left out of government's pensions "lifeboat"

A total of 61,000 workers whose pensions were lost when their employers went bust will be left out of the government's compensation plans.

12:15 23 February 2005

A total of 61,000 workers whose pensions were lost when their employers went bust will be left out of the government's compensation plans, released yesterday.

The Department for Work and Pensions is to make 400 million available under its Financial Assistance Scheme, but the terms of the scheme mean that it will exclude the majority of affected people.

The cut-off date for the scheme is May 14, 2004. Only those who were within three years of retirement on that date will be eligible for payments under the FAS.

This amounts to around 4,000 out of a total of 65,000 people whose occupational pensions were lost with the bankruptcy of their employers.

The DWP has refused to comment on payments to the remaining 61,000. Pensions minister Malcolm Wicks, however, undertook to review the cost and funding of the scheme after three years.

Deborah Cooper, senior research actuary at Mercer, told the Times newspaper, "this is going to remove just a small number of people from the pool, and those who are just outside the three-year cut-off will rightly feel aggrieved."