Unite says a retired worker whose pension was earned before 1997 is only getting 50% of its value
Unite has called on the government to use reserves in the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS) to inflation-proof pensions.
The trade union said that, under current rules in both funds, pension contributions paid by workers before 1997 are not inflation proofed at all.
It said this means that a retired worker whose pension was earned before 1997 is only getting 50% of its value – adding that, 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.
Unite said some 400,000 retired workers have pensions held by the PPF or FAS which were earned before 1997 – adding that all would benefit from inflation proofing to a greater or lesser extent depending on years worked and pay rates.
It said there was an "urgent" need for action – saying around 15 retired workers with pensions earned before 1997 pass away each day.
Unite also hit out at the decision to reduce the PPF levy to zero this year – a move the lifeboat fund announced last week (23 September).
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."
