Minister Accused of misleading thousands over pension compensation

22 January 2010

Pensions minister Angela Eagle has been accused of misleading the public in regards to compensation for collapsed pension funds.

The Department for Work and Pensions released a statement yesterday (January 21st) announcing trustees of schemes at firms which had "gone bust" would receive "at least" 90 per cent of their savings in compensation through the Financial Assistance Scheme (FAS).

However, this has been disputed by independent policy advisor Dr Ros Altmann who claimed the amount will only by "up to" 90 per cent with many trustees receiving less.

"Angela Eagle says FAS will guarantee at least 90 per cent - this is simply not true," said Dr Altmann.

"Does she not know, or does she not want to admit the truth?" she added.

Fears that the payments could indeed be lower than the government has claimed could result in a number of people taking out additional retirement fund policies.

Schemes such as equity release can ease a homeowner's financial burdens with cash drawn from the value of their property.