Pension crisis solution?

By JUSTIN HARPER FOR MAILONLINE
Updated:

 

THE Government has confirmed it is working on a 'solution' to bail out thousands of people caught up in pensions wind-ups.

Many workers are facing hardship after employers wound up their pension schemes either after going bust or by choice, leaving them with a severely reduced pension, or nothing.

Many believed their pensions would be protected if their company hit financial trouble.

Pensions Minister Malcolm Wicks has strengthened comments made by Tony Blair at Prime Minister's Question Time last week that he was looking at ways of helping this 'very particular and special case'.

Mr Blair's comments came on the day Money Mail carried a direct plea to him from members of the failed Allied Steel & Wire.

The following day Mr Wicks said: 'We are not pretending this is an easy problem to solve. My hope is the same as the PM's in that we will be able to come forward with a solution for those workers under the legacy of past failure.'

The Government is working with trustees to gather data about company schemes to work out how many people are victims of pension wind-ups, he says. The figure is likely to be more than 60,000.

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'Everyone has acknowledged the complexity of circumstances which have led to some people losing pension rights and facing a bleak future on retirement despite having saved in their company pension scheme. It has been uppermost in our minds,' Mr Wicks adds.

Many of the victims were forced by the Government to join their company pension schemes. Others were misled into believing their pension pots were fully guaranteed and secure.

A third Early Day Motion (EDM) was put forward last week on the issue of pension wind-ups.

Liberal Democrat leader Charles Kennedy says Government regulations, announced last week, changing how pension assets are divided when a scheme goes into wind-up, won't work and should be scrapped.

Two other EDMs are gaining momentum. One calling for compensation has now gained nearly 300 signatures - more than 200 from Labour MPs.

Another says that compensation should come from £15bn of unclaimed money banks and building societies are sitting on.

• BARBARA Allen looks set to lose her company pension, which she has been paying into for nearly 20 years. Barbara, from Cowley, Middlesex, worked as a technical administrator for 17 years for Arthur Sanderson & Sons, which made fabrics, wallpaper and curtains. The firm went into receivership last summer. The pension fund is now being wound up by independent trustees Hogg Robinson.

She says: 'We have been told sorting out the fund may take between three and six years. But I'll be 60 soon, so this is no use to me, and even then there's no guarantee I will get anything.'

Barbara was hoping to get a pension of £300 a month, but this looks increasingly unlikely.

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