Pensions insolvency scheme has paid just 113 people

The Financial Assistance Scheme - set up by the Government to help some of the 125,000 people who lost their pensions when their companies went bust - has still only made payments to some 113 people - a fraction of the thousands who should be in line for immediate help.

Responding to a Parliamentary question, laid by the Liberal Democrat peer Lord Oakeshott of Seagrove Bay last week, the pensions minister James Purnell confirmed that only £347,888 had been paid out through the scheme more than two years after it was first devised. However, he conceded that the Governmenthad spent almost £6m administering the scheme.

Several thousand of those who lost their pensions are now past retirement age, but have not received a penny from the scheme. A handful of those who would have been eligible have now died, before receiving a single payment.

"The Government is paying a pittance at a snail's pace to less than one in 1,000 of those who have been robbed of their pensions," said Lord Oakeshott. "It's a disgrace that for every £1 of running costs, only 16p has been paid out to beneficiaries. James Purnell must get a grip and sort this system out."

Last month, Mr Purnell said that the Government was considering outsourcing the administration of the FAS to the private sector. He is expected to publish a written statement concerning the future of the scheme today or tomorrow.