£400m fund to aid pension victims

A £400 million fund is to be set up to help the 60,000 workers who lost pensions when their firms went bust, the Government announced today.

A £400 million fund is to be set up to help the 60,000 workers who lost pensions when their firms went bust, the Government announced today.

Unions warmly welcomed the move, which followed a campaign for justice for the workers as well as threats of legal action.

Work and Pensions Secretary Andrew Smith said money will be paid in instalments over 20 years, with the possibility of further contributions from industry.

Ex-workers of steel, engineering and manufacturing companies across the UK have taken to the streets in increasing numbers in recent months to protest at losing all or part of their occupational pensions.

TUC general secretary Brendan Barber warned today that workers were ready to strike in protest at losing company pensions or seeing worse schemes introduced.

Mr Smith said the Government was tabling an amendment to the Pensions Bill, which is due to be debated in the Commons next week, paving the way for a Pension Protection Fund to compensate workers whose firms go out of business in the future.

The minister said the fund will ensure workers get a worthwhile pension when their employer becomes insolvent and their scheme winds up underfunded.

"But the protection the fund gives is cover for the future, and cannot help those who have already lost out.

"The severe losses that some individuals have already suffered in insolvent pension wind-ups has caused considerable hardship.

"The Government will therefore make available £400 million of public money to be paid in instalments over 20 years with the possibility of further contributions from industry, to provide assistance in such cases.

"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."