If your pension scheme qualifies, the amount of compensation you get depends on whether you had passed your normal pension age when your employer became insolvent.
Anyone receiving survivor’s pensions, such as a widows, widowers, children’s, civil partner’s pensions will also normally qualify for 100% of the pension income.
If you were over your normal pension age or started drawing your pension early to due to ill-health, you’re entitled to receive a full pension from the PPF.
If you were under your normal pension age, you’re entitled to receive a pension of 90% the amount you’ve built up when your employer became insolvent. This is also subject to an upper cap set by the government.
For example, the cap from 1 April 2021 up to and including 31 March 2022 for a 65-year-old is £41,461.07.
Any compensation paid will be increased in line with legislation and not with the former scheme rules.
Increases in PPF compensation will be limited to benefits built up from 6 April 1997 only. Increases in payment are in line with inflation, capped at a maximum of 2.5%.
The PPF doesn’t apply to defined contribution workplace pension scheme benefits (money purchase benefits).