Anger over double standards on Northern Rock

The Government has been accused of double standards for guaranteeing an unlimited bail-out of Northern Rock savers.

Pensions campaigner and consultant Dr Ros Altmann says agreeing to pay Northern Rock savers, regardless of their financial situation, when it has yet to make any payments into the Financial Assistance Scheme, is unfair. The accusation comes as the DWP blames trustees for the delay in payments from the FAS.

Bank savers are protected up to 90 per cent of 35,000 in savings, but the FAS only pays around 65 per cent of pensions to those who lost out when schemes went bust before the establishment of the Pension Protection Fund. Some schemes are not eligible for the FAS and their members are not getting any government support, adds Altmann.

Naked pensioners will be travelling from across the country to Bournemouth for a repeat of their beach protest outside the Labour Party conference this month.

Meanwhile, Mike O’Brien, minister for pensions reform, wants trustees to cooperate with measures to speed up FAS payments to people aged 65 and over.

The DWP says it has speeded up the payment process to get around delays caused by trustees not applying for FAS “initial payments” to top up interim pensions paid by the winding-up schemes. It says there should now be no good reason for trustees to not ensure that eligible members receive FAS benefits.

Altmann says: “Members of final salary pension schemes which failed after 1997 and before the Pension Protection Fund started had no idea that their pensions were not completely safe – they believed Government assurances that their pensions were ‘guaranteed’, as so many official publications claimed.”

“The Parliamentary Ombudsman said the Government should pay 100 per cent compensation, plus damages for their stress and distress suffered over the years they have been fighting and begging for justice. The Government has consistently said taxpayers cannot be expected to compensate the victims of this scandal. Why is Northern Rock different?”

O’Brien says: “The response of a number of trustees so far has been disappointing. Some 200 schemes in wind-up have not even applied for initial payments.”