Calls for the government to use reserves from the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) to fund inflationary increases have continued to grow, as Unite Union joins those calling on the government to take action.
 
Unite noted that, under the current rules in both the PPF and FAS, pension contributions paid by workers before 1997 are not inflation-proofed at all, meaning that a retired worker whose pension was earned before 1997 is only getting 50 per cent of its value. 
 
For a worker with an average pension (value of £48,000) earned before 1997, inflation-proofing would increase the total value of the pension pot by at least £24,000.
 
Emphasising the scale of this issue, Unite pointed out that around 400,000 retired workers have pensions held by the PPF or FAS which were earned before 1997, all of whom would benefit from inflation proofing to a greater or lesser extent.

Unite also stressed the urgency of this issue, pointing out that around 15 retired workers with pensions earned before 1997 pass away each day.

This is a message that has been repeatedly emphasised by those involved with this issue, as the Work and Pensions Committee also previously raised concerns over the pace of change being seen given the ages of those involved, whilst the Pensions Action Group (PAG) said that, even in the last few months, it has lost "so many FAS members".

Unite general secretary, Sharon Graham, said: “It is scandalous that the total PPF surplus reserve has ballooned while pensioners continue to suffer.

“Inflation-proofing pensions would benefit hundreds of thousands of pensioners at no extra cost to the taxpayer. Pensioners who through no fault of their own have been left reliant on PPF or FAS pension funds in their retirement, deserve a fair pension.”

Pre-indexation of PPF and FAS pension benefits is an issue that has been raised repeatedly over recent years, but the focus on the issue has grown amid the Pension Schemes Bill, with many calling on the government to use this bill to address the concerns.

Calls for action have also been emboldened by the recent funding improvements seen at the PPF.

Although the government has said that using PPF reserves to fund indexation is not as straightforward as it seems, given the impact on taxpayers, the PAG argued that this "hides the truth about the formation of FAS and the PPF, and the £2bn residual funds from the failed FAS schemes".

The PAG also raised concerns over some of the Pension Schemes Bill amendments tabled so far, warning that the new clauses 18 and 19, would not work as currently drafted.

"The new clauses as drafted would apply to subsets of the PPF population," the group explained.

"Some pensioners would receive indexation, and some would not. The same flaws in the new clauses apply to FAS."

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