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Altmann compares victims of final salary pension schemes to NR customers

Pension consultant Ros Altmann claims that while the government is promising Northern Rock customers that their savings are protected, victims of collapsed final salary protection schemes are still fighting for their money.

Altmann says there are several points that need to be considered when comparing the two cases:

• Northern Rock savers were not told by the Government that their money was completely safe and protected by law.

• Northern Rock savers knew they were only covered by an insurance scheme that protected them up to around £35,000 each (and only 90 per cent not 100 per cent).

• Northern Rock savers had a choice as to where to put their money.

• Northern Rock savers were allowed to withdraw their money at any time – nobody has lost a penny of their life savings.

• Result: Northern Rock savers have had their savings fully underwritten by the taxpayer, up to unlimited amounts.

However:

• Members of final salary pension schemes, which failed after 1997 and before the Pension Protection Fund started, had no idea that their pensions were not completely safe – they believed Government assurances that their pensions were ‘guaranteed’, as so many official publications claimed.

• These members of final salary pension schemes were assured by the Government – by this Chancellor himself – that their pensions were totally safe and protected by law, even after Alistair Darling was warned by the actuarial profession in 1999 that members had no idea they were not really protected at all and should be told.

• These final salary pension scheme members were not allowed to have any other pension and were totally relying on their company scheme for a decent retirement – once in their company scheme most could not have another pension.

• The Parliamentary Ombudsman said the Government should pay 100 per cent compensation, plus damages for their stress and distress suffered over the years they have been fighting and begging for justice.

• Result: The Government has consistently said taxpayers cannot be expected to compensate the victims of this scandal and the Financial Assistance Scheme only offers some of them (not all schemes are included!) about 65 per cent of the pension they have lost.

Altmann says: “The unlimited bail out of Northern Rock savers is, of course, welcome news to those individuals affected, but it also surely shows that this Government’s treatment of the victims who lost their pensions after believing that their money was completely safe and protected by law, because that is what the Government actually repeatedly told them, is unacceptable.”

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