Hundreds of retired individuals have been informed of a one-year delay in the increase of their pension payments. This delay impacts beneficiaries of the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS), both government-backed entities that safeguard pension savers with defined benefit schemes.
Approximately 330,000 retirees under these programs were initially advised that their payouts would be adjusted for inflation starting as early as January 2027. However, recent reports from the Telegraph reveal that 66,000 individuals will have to wait until at least 2028 for any increase due to the PPF’s inability to meet the deadline.
Changes announced by former Chancellor Rachel Reeves in the last Budget will now extend increases to pre-1997 pensions, with a maximum annual cap of 2.5%. The adjustment is expected to benefit around 265,000 pensions from January 2027, while the remaining 66,000 affected will only see increases on their Guaranteed Minimum Pension (GMP) starting in 2028.
GMPs, which are minimum pensions typically provided by workplace pension schemes, increase with inflation up to 3% annually, excluding those under the PPF and FAS. Pension schemes falling between January 1997 and April 2005 are covered by the FAS, while those beyond that period fall under the PPF’s coverage.
The PPF spokesperson emphasized the phased implementation of these changes to ensure accurate and timely delivery to all affected members. A government representative highlighted the significant impact of these changes, benefiting over 250,000 PPF and FAS members with most eligible beneficiaries set to receive adjustments from January 2027.