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Last Updated: Wednesday, 30 June, 2004, 15:13 GMT 16:13 UK
'65,000' hit by pension wind-ups
A pensions march
An estimated 65,000 people have been hit by pension wind-ups, the Department for Work and Pensions has said.

The new figure was published following research by the department based on 250 final salary schemes.

Of the 65,000 members facing losses, 35,000 workers are facing losses of 50% or more.

The government is creating a 400m "Financial Assistance Scheme" to compensate workers who lost their pensions when their firms went bust.

The money will be shared over 20 years, with additional funds sought from industry.

65,000 members are facing significant losses of 20% or more of their pension and within that:
60,000 have losses of 30% or more;
50,000 have losses of 40% or more;
35,000 have losses of 50% or more

The department said it had been the most extensive attempt yet to try to quantify the problem.

Pensions Minister Malcolm Wicks said: "With the information gathered, we will be working across the coming months with the pensions industry, unions and the business community to put details together on how the FAS is going to work, how much help we can provide to people and how we get that help to them."

This latest estimate is 5,000 more than the 60,000, previously touted.

It could add to concerns that the 20m a year fund is far from sufficient to meet the needs of those who have lost out.

The government is currently consulting on the introduction of the scheme, which is expected to be up and running by Spring 2005, with the first payments being made "as soon as its' practical".

T&G union recently expressed concern that the fund could amount to "peanuts" for workers who have been affected.

Others are concerned that the fund will not extend to workers who have lost out from solvent employers who have voluntarily wound-up under-funded pension schemes.

Steve Webb MP, Liberal Democrat Shadow Work and Pensions Secretary, said the figures underestimated a wider problem.

"The scale of these losses shows that the Government's hardship fund is simply inadequate and is unable to cover everyone affected," he said.

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