On 6th June, the House of Lords backed Conservative Party proposals to introduce a ‘Lifeboat Fund’ for pensions, putting the pressure firmly on Gordon Brown to act on pensions when he succeeds Tony Blair in less than three weeks.

The House of Lords voted 179 to 124 in favour, with cross party support for the Conservative proposal. Labour MP’s had earlier voted down the in the House of Commons.

Since 1997, around 125,000 people have lost some or part of their pension savings due to the insolvency of the sponsoring employer or because the employer is no longer in business.

Jeremy Lefroy, Conservative parliamentary candidate for Stafford and Penkridge said,
“The proposed new Lifeboat Fund would provide more generous benefits to top up the pensions of thousands of vulnerable people who have lost their pension savings. Benefits would be raised to the level provided by the Pension Protection Fund.

“It will be funded by unclaimed financial sector assets, topped up by Treasury loans in the short term to allow it to begin paying out immediately.

“The Conservative Party, backed by the Liberal Democrats and others, is putting forward serious, workable and responsible proposals to Parliament to bring back hope to the lives of thousands of pensioners. We trust that the Labour government will now take these proposals seriously and that Labour MP’s will think again.”

The Financial Assistance Scheme (FAS) set up by Gordon Brown in 2005 was supposed to provide help to people who lost all or part of their pension between 1997 and 2005 (before the Pension Protection Fund (PPF) was introduced). However it has been dogged by slow payments. Some 10,000 people should be receiving FAS help now , and a further 115,000 when they reach 65. But the FAS has only made payments to 1,229 people

The scheme is also limited to 80% of ‘core’ pension rights, and capped at £26,000 per year. This is less generous than the benefits provided by the PPF which provided 100% compensation for people already over their schemes retirement age and 90% for those under it.