MPs urged to use Pension Schemes Bill to address pre-1997 pension indexation concerns

MPs have faced growing calls to amend the Pension Schemes Bill to require pre-1997 indexation on Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) pension rights.

An update from the Pensions Action Group raised renewed concerns over the lack of any indexation on pre-1997 pensionable service, warning that urgent action is needed to address these concerns and "correct this major injustice".

The PAG acknowledged that various MPs and members of the House of Lords are expected to introduce an amendment to the bill to remedy this situation.

However, the group argued that "we need every MP to support the amendment", emphasising that it is still "frustratingly" waiting and campaigning for change, more than 23 years since it began. 

Whilst the PAG was told by the former government that the then Pensions Minister, Paul Maynard, had agreed the vital indexation changes with the DWP and Treasury, progress since has been thin. 

Indeed, the PAG's latest update confirmed that, despite meeting with the current Pensions Minister, Torsten Bell, in early 2025, it has failed to make further progress on its call for change.

And whilst the PAG acknowledged that a solution is being ‘worked on’, it has been repeatedly told that it is ‘very complicated’.

However, the group warned that many of those impacted cannot wait much longer, revealing that 5,343 FAS members have died since the group's evidence session with the Work and Pensions Committee.

Since the formation of FAS in 2004, the number of recipients has reduced from 140,000 to 90,000.

Given this, the PAG stressed the need for any changes to come sooner rather than later, building on recent comments from Work and Pensions Committee chair, Debbie Abrahams, who stressed that the change in rules for the FAS was "particularly urgent," given the age of those involved and the ongoing impact of having part of their income frozen.

The PAG also hit back at the government's warning that using PPF surplus to fund indexation is not as straightforward as it seems, given the impact on tax payers, arguing that this "hides the truth about the formation of FAS and the PPF, and the £2bn residual funds from the failed FAS schemes".

"In the last few months, we have lost so many FAS members and to delay and continually ignore this major social injustice remains both financially and morally wrong, and devastating to the individuals affected, and their spouses," the group stated. 

"We implore the minister to act immediately to correct this major injustice. Confidence in pensions savings is at an all-time low, and the country needs some reassurance that when workers save for their retirement their savings will be safe and secure!"



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