The Government has pledged to make an announcement on the Financial Assistance Scheme (FAS), set up to bail out thousands of pensioners whose employers went bust, in "the next few days".
Speaking during today’s Prime Ministers Questions, Gordon Brown said he was confident he will be able to guarantee 90% of the pensions, which affect 125,000 people.
However, Brown’s comments have been condemned as “spin” and the Prime Minister accused of offering false hope.
Brown’s comments follow speculation this week he has vetoed plans to compensate the pensioners, overruling the Cabinet.
Work and Pensions Secretary, Peter Hain, is understood to have already put aside £725m of his department's budget to beef up the FAS.
It would bring the Financial Assistance Scheme - to which the Government has already committed £1.5bn - into line with the Pension Protection Fund (PPF), which compensates victims of later pension fund collapses.
Andrew Young, the Government's chief actuary and author of a yet-to-be-published report into the situation, said the money would give the workers 90% of the value of their lost pensions.
But, according to today’s comments, Gordon Brown says he intends to honour the Government’s original promise.
Campaigner Dr Ros Altmann, of the Pensions Action Group, says talk with no action is leading to confusion.
“[Gordon] Brown’s answer today is potentially the same sort of spin we have had to put up with throughout on the FAS,” she says.
“He doesn’t explain what he means; 90% of what? We need a commitment that the people who are already past pension age would have got the same as if the PPF [Pension Protection Fund] had existed before 2005.
“Brown would like to get away with the fact the FAS is apparently paying 90pc of people’s pensions when he knows that’s not the case.
“Some [people] aren’t getting anything. It’s raising people’s hopes and it’s leading to confusion.”
020 7034 2636
What made financial headlines over the weekend?
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch