Government unveils pension ‘rescue’ package

A new pension package designed to help those people who lost savings when their employer-sponsored pension collapsed, has been unveiled by the Government.

Earlier this week Secretary of State for Work and Pensions, Peter Hain, announced a rescue scheme to restore 90% of the savings accrued by workers before their pension was wound-up, subject to a cap of £26,000.

Under the new rules members will be able to draw a tax-free lump sum, if applicable, while people unable to work due to ill health will be allowed early access to payments.

The pension settlement will benefit around 130,000 already eligible under the Financial Assistance Scheme, and will be extended to include a further 11,000 workers who were members of solvent employer pension schemes.

Mr Hain said he believed the rescue package represented ‘a just and final settlement’ for employees who were ‘cruelly robbed’ of their pensions ‘through no fault of their own.’

The announcement has been welcomed by trade union groups, who had been campaigning for ministers to intervene.

A further announcement finalising the new legislation is expected in the New Year.