The government is sending out mixed messages by bailing out Northern Rock but not offering guarantees to the 120,000 pensioners who lost money when their employers went bust.
MyCompanyPension.co.uk director Mike Jones asks why the government is stepping in to guarantee Northern Rock savers’ deposits but is not doing the same for pensioners who lost money when their schemes collapsed.
The pension education website director Jones says: “Employees were mislead by successive Governments into believing their pensions were guaranteed when they were not. What is so different with savers that the Government steps in with an unlimited guarantee?
“The Government was dragged kicking and screaming into launching the Financial Assistance Scheme to help the tens of thousands of pension scheme members who had lost their pensions through no fault of their own and who were not covered by the Pension Protection Fund.
“The FSCS is the poor relation of the PPF. Since it was set up over two years ago it has paid out less in compensation to workers and pensioners than it has spent on administration and has made payments to less than 2000 individuals. Nobody wants to see savers losing money. Losing confidence is bad enough, but I can’t help but feel that this is a real slap in the face for workers and pensioners who have fought hard to get compensation since their schemes failed.”