Member

The big question of indexation, particularly pre-1997 indexation, was raised by pretty much everybody. We are rightly proud of our pension protection system, but it is not surprising that cost of living challenges and levels of inflation, coupled with the strengthening position of the PPF, have led to calls to change indexation rules. Obviously, noble Lords have noticed that PPF and FAS members do not receive increases on payments based on pension protections accrued before 1997. I simply say that the Government understand the importance of ensuring that PPF and FAS members can enjoy a secure retirement; however, the introduction of pre-1997 indexation raises a range of cross-cutting issues. We need to ensure that any proposals are fair to members of the compensation system and members of DB schemes more broadly. Any solution must strike a balance between the interests of levy payers, affected members and taxpayers. As noble Lords will be aware, this matter was raised in the report published by the Work and Pensions Select Committee last year. We will respond to the committee very soon, having carefully considered all of its 23 recommendations.