The government has admitted that the £400 million fund set up to compensate workers who have lost their pensions when their final salary schemes went bust is not nearly enough to protect younger workers.
Thousands of private sector workers have been robbed of their pensions when their company pension schemes became insolvent.
Nearly 400 schemes have hit the rocks, leaving tens of thousands of workers facing an uncertain future when they retire.
After months of stalling, pensions minister Malcolm Wicks last week conceded that all the money in the Financial Assistance Scheme had been earmarked for 15,000 people who are set to retire in the next three years.
It is estimated that another £2.6 billion will be needed to fund the pension benefits of the other 50,000 victims over the next 40 years.
The scheme is meant to guarantee 80 percent of workers’ lost pensions. But the government has confirmed that the payout will be capped at just £12,000 a year.
This is less than half the £25,000 limit under the new Pensions Protection Fund set up to cover workers whose pension schemes go bust in future.
Both figures fall far short of the huge pensions scooped up by company bosses.