Court backs pension victims
Wednesday, 21 Feb 2007 09:56
The government is likely to appeal today's decision
Thousands of people who lost money when their company pension funds collapsed are entitled to compensation from the government, the High Court has ruled.
More than 80,000 people lost all or part of their savings when occupational pension schemes closed with enormous deficits between 1997 and 2005.
The government has so far refused to pay compensation despite a ruling by the parliamentary ombudsman, Ann Abraham.
Ms Abraham said last year that the government was guilty of maladministration and should pay compensation.
But with the bill sitting at around £16 billion, the government has so far refused to budge, prompting four pension victims to take their case to the High Court.
They claimed that the government encouraged them to invest in occupational pension schemes and gave them assurances that their money would be safe.
This morning's ruling backs the view held by the parliamentary ombudsman that the government is liable.
While the Department of Work and Pensions has set up a financial assistance scheme to cover the collapse of occupational pensions, it is only designed to help those affected after April 2005.
Tony Blair told the House of Commons last year that he could not justify using billions of pounds of taxpayers money to pay compensation to victims of private schemes.
Despite the High Court ruling, the four claimants still face a long wait for their money as the government is likely to appeal the decision.