New help for early retirement workersFinancial Assistance Scheme extended

29 March 2008

Coins and bank notes

The government has unveiled plans to help workers who have to retire early due to ill health but who lost their company pensions when their employer went bankrupt.

Under the draft regulations, people who qualify for help from the Financial Assistance Scheme (FAS) will be able to get payments up to five years before their scheme's normal retirement age if they are unable to work for health reasons.

The regulations, which have been published for consultation, also aim to speed up the time it takes for people to receive payments from the scheme.

The FAS was set up to help people who belonged to pension schemes that were wound up but did not have enough money in them to pay all the benefits people had accrued.

Pension payments

It has so far helped around 5,088 people and Minister for Pensions Reform Mike O'Brien said: ‘People who have to stop working early because they are sick will be able to access their FAS money.

‘Everybody is agreed FAS members should receive their payments as quickly as possible - so we have been continuing to work with trustees and other stakeholders to look at ways in which this process can be speeded up.

‘The changes made by these regulations will mean we have the basic information to enable payments to be made faster.’

Other measures being introduced will see up to 11,000 people from 162 schemes, where the employer is still solvent but the scheme has been wound up underfunded, qualify for help from the FAS.