14 May 2004 - Smith announces £400m government assistance for workers who have lost their pensions
New proposals to support workers who have lost their pensions were unveiled today by Pensions Secretary, Andrew Smith.
The Pensions 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.
So, Andrew Smith is today laying an amendment to the Pensions Bill to help thousands of workers who have already lost out in pension wind-ups so that they are eligible for new help. His proposals establish a Fund, with £400 million of public money to be paid in over 20 years with the possibility of further contributions from industry. Details of the fund's operation will be worked out in consultation with stakeholders, and we will review the operation of the fund in three years time.
Andrew Smith 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 DWP is completing its detailed 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.
As this will benefit not only those directly affected but also pension providers and the pension industry, we will work with key business representatives, unions and others on the various ways they may be able to help and whether they may now make a contribution.
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.”
Notes for editors
- The Pensions Bill was published on February 12th 2004 and is available at: http://www.publications.parliament.uk/pa/cm200304/cmbills/096/2004096.htm
- The Pensions Bill contains measures such as the Pension Protection Fund, taking your Basic State Pension in a Lump Sum and promoting pension and retirement provision in the work place. Further details can be found at:
http://www.dwp.gov.uk/mediacentre/pressreleases/2004/feb/pensbill_120204.asp - The Chair of the Pension Protection Fund, subject to Parliamentary approval was announced on 13th May as Lawrence Churchill.
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