James Daley: Can this pensions mess get any worse?
Saturday 28 January 2006
The plight of the 85,000 pensioners who lost most or all of their retirement savings when their companies went bust has gone from bad to worse in recent weeks.
As regular readers of this column may remember, the Government (reluctantly) first promised to provide compensation for these victims almost two years ago. Yet, as of last week, just 13 people had received a payout from the limp and chronically underfunded "Financial Assistance Scheme" (FAS).
Several of those whose need was greatest died before receiving a penny. Even the 13 who have been paid so far have been warned that they may have to return some of the money if it turns out that there isn't enough to go round for others in their scheme.
Meanwhile, those who were lucky enough to have begun withdrawing their pension before their fund went into wind-up have recently been told that their income is to slashed by a third. Some reward for a lifetime of work and saving.
Although the Department for Work and Pensions insists it is working as fast as it can to distribute the FAS funds, the desperately slow progress is of the Government's own making. When Chancellor Gordon Brown first gave the green light to the creation of the FAS in May 2004 (to avoid a backbench revolt), the then pensions minister implied that an additional £400m would be found from the public purse to fund it.
Behind the scenes, however, the Treasury told the DWP to use its own annual budget, ensuring that the department could not afford to plough any substantial additional resources into ensuring that the scheme was set up quickly and administered efficiently.
On a more technical note, the Government's refusal to pool the assets that were left in the defunct pension schemes (ie, running the FAS along the same lines as the privately funded Pensions Protection Fund) has ensured that victims will receive even less than they might have hoped.
Instead, the Government insisted on buying annuities for each individual member. And, due to the collapse in the yields of government bonds in recent weeks, the level of income that can be bought with an annuity is now much less than it was.
It still astonishes me that this issue does not get a higher profile in the media. That a Labour Chancellor is doing everything he can to ignore the plight of 85,000 hardworking and honest individuals - who lost a lifetime's savings through no fault of their own - is nothing short of scandalous.
Within the next four weeks, the Parliamentary Ombudsman will publish her report into whether the Government is to blame for letting these people believe their pensions were guaranteed. Although the initial report (which was ready in June) was believed to be scathing, it has since been lost in the corridors of Whitehall - no doubt to be watered down. The Conservatives and Liberal Democrats must now seize the momentum to ensure that the Government is forced to fully compensate the victims of this scandal.
nnn Which?, the consumers' association, is again moaning about the confusion over cash-machine charges, claiming that half the population don't know which banks will charge them and which won't. This isn't surprising; repeated surveys from the likes of Nationwide, warning that most ATMs now charge a fee, are bound to concern and confuse consumers.
But these surveys rarely explain that the growth of fee-charging machines has not been at the expense of free cashpoints. Almost none of the banks charge for cash withdrawals these days, and if they do, it is always clearly stated on the machine or at the point of withdrawal.
David Prosser is away
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israel hide facts
- 4 Richard Dawkins says 'date rape is bad, stranger rape is worse' on Twitter
- 5 Danish TV reporter is all business up top, all party down below
The secret report that helps Israel hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
- < Previous
- Next >
iJobs Money & Business
£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...
£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...
£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...
£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000