Hundreds of thousands of British pensioners, who have been fighting for over a decade to recover massive losses from collapsed company schemes, have been dealt a fresh blow by Chancellor Rachel Reeves. A key budget change designed to help them will not come into force for years and will not apply to past losses.
A Thirteen-Year Battle for Lost Pension Value
Maurice Alphandary, 71, is one of an estimated 430,000 people currently receiving payments from the Pension Protection Fund (PPF). The PPF acts as a lifeboat, stepping in to pay retirees when defined benefit pension schemes become insolvent. Mr Alphandary has been fighting for thirteen years to recoup losses stemming from the failure of his former employer's scheme.
He has already seen £40,000 wiped from his expected retirement income and projects his total lifetime loss could reach between £150,000 and £200,000. "I'm very angry. All AEA Technology pensioners are aggrieved. I paid extra, as did we all, for an RPI-linked pension," he stated.
Budget Promise Brings Limited Relief and a Long Wait
In her Autumn Budget, Labour Chancellor Rachel Reeves announced a policy shift to address a long-standing grievance. She pledged inflationary increases of up to 2.5% for pre-1997 pension entitlements held within the PPF. The stated aim is to ensure "people whose pension schemes became insolvent [through] no fault of their own no longer lose out as a result of inflation".
However, this change carries two significant limitations that have angered campaigners. Firstly, it will not begin until 2027. Secondly, and crucially, it will not be applied retrospectively. This means years of already-eroded pension value will never be restored.
"The Chancellor's announcement is a little bit of progress, but all it means is our losses will be lessened by a few per cent. It's not gone nearly far enough," said Mr Alphandary. He directly linked his situation to "government malfeasance on the privatisation of AEA Technology".
Campaigners Demand Faster, Fairer Compensation
Pensioner advocates have welcomed the principle of the change but condemned the delayed implementation and lack of back-payment. Labour's Neil Duncan-Jordan highlighted the enduring injustice, stating: "None of these measures will ever make up for the lost years of pension increases."
He added a sense of urgency, noting: "As the number of those affected starts to dwindle, we need to find a more certain way of ensuring they are protected from further inflationary pressures and compensated for at least some of the losses they have suffered."
The Department for Work and Pensions (DWP) defended the move, with a spokesman saying: "Over 250,000 pensioners will benefit from these increases announced in the Budget – reversing a policy which has been in place for over 20 years." They also pointed to the government's commitment to the state pension triple lock.
A spokesman for the PPF said: "We've been working with member groups and the DWP for a number of years on this issue and recognise its importance to members. Our focus is on getting ready to implement the change at the earliest opportunity after it becomes law."
For retirees like Maurice Alphandary, the wait continues. He summarised the personal impact: "If my full pension were being paid now, I wouldn't have to run down my savings at anywhere near the rate that I am."
