The Pensions Act 2004 put in place the Financial Assistance Scheme (FAS) which provides support to members of defined benefit occupational pension schemes which started to wind up, underfunded, between 1 January 1997 and 5 April 2005. At that time the Government committed the equivalent of £400 million cash of taxpayers’ money spread over 20 years.
On 25 May 2006, as part of the White Paper, “Security in Retirement: towards a new pension system”, a further £1.9 billion cash was allocated, bringing the total funding to £2.3 billion.
In his Budget speech on 21 March 2007 the Chancellor announced that we now intend to increase total long-term expenditure on the FAS to £8 billion. This equates to more than doubling funding for the scheme in ‘present value’ terms, from £830 million to £1.9 billion and will allow us to further increase the scope of the payments.