Financial assistance scheme (FAS) meaning

In this issue: Pension Schemes Bill Salary sacrifice Collective defined contribution schemes Daily and weekly news alerts Dates for your diary Trackers Pension Schemes Bill Day 7 Grand Committee: indexation reforms approved, AWE proposal withdrawn By the close of the seventh sitting of the House of Lords Grand Committee on the Pension Schemes Bill, held on 5 February 2026, the government had won the House’s consent to its complete suite of technical changes on pre-1997 indexation for the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS). Nevertheless, its principal structural amendment to create a new public sector AWE pension arrangement was withdrawn following concerns raised in debate, and no substitute amendment was tabled that day. The Grand Committee is next due to meet on 23 February 2026 and 3 March 2026 to scrutinise the remaining elements of the Pension Schemes Bill. Indexation of Pension Protection Fund compensation for pre-1997 service (Clauses 108-110) Clause 108...

PAG, in a letter dated 11 January 2026, warned that existing plans to pay only 'progressive' increases in benefits from January 2027 might arrive too late for many pensioners. In December 2025 the government, responding to pressure from campaigners, said it would insert fresh measures into the Pension Schemes Bill to provide benefit increases from January 2027 to pensioners receiving payments via the Financial Assistance Scheme (FAS) or the Pension Protection Fund (PPF). Under the rules of the FAS and the PPF, pensioners who accrued benefits prior to April 1997 have been denied inflation-linked annual increases, also widely known as indexation adjustments...

In this issue: Pension Schemes Bill Finance (No.2) Bill 2025–26 National Insurance Contributions (Employer Pensions Contributions) Bill The Pensions Regulator Pension scams and liberation Dates for your diary Trackers Pension Schemes Bill Pension Schemes Bill Pension Schemes Bill Report Stage and Third Reading—government amendments agreed and statutory guidance on fiduciary duty promised On 3 December 2025, during Report Stage and the Third Reading of the Pension Schemes Bill, the government secured a series of amendments to the legislation. These changes include: Giving effect to the government’s decision to provide inflation protection for pre‑1997 pensions within the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS), as trailed in the Autumn Budget on 26 November 2025. From January 2027, members’ pre‑1997 accruals in the PPF and FAS will receive CPI‑linked increases each year, capped at 2.5%, where their original schemes offered this entitlement...

FORTHCOMING CHANGE 1 : Section 10 of the Finance Act 2022 will raise the normal minimum pension age (NMPA) from 55 to 57 on 6 April 2028, except for members of the firefighters, police and armed forces public service pension schemes. This increase applies broadly across registered schemes, subject to the stated exemptions. The same Act will also permit members of registered pension schemes to access benefits before 57 where, on or before 4 November 2021, they either held an ‘unqualified right’ to draw benefits, or were already engaged in a substantive transfer to a scheme providing an unqualified right to a protected pension age below 57 on or before 4 November 2021. To rely on this new protection applying in 2028, the scheme’s rules must, as at 11 February 2021, have contained an unqualified right to take entitlement to scheme benefits before age 57. For more detail, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact. FORTHCOMING CHANGE 2 : The Pension...

Criteria for eligibility for the Financial Assistance Scheme The Financial Assistance Scheme (FAS) closed to notification and qualification of new pension schemes on 1 September 2016. Members already receiving, or holding a deferred right to receive, assistance payments from the FAS are not affected by this closure. For FAS payments to be made, separate yet connected conditions must be met for: the scheme its sponsoring employer(s) the individual members As a rule, underfunded defined benefit schemes that began winding up on or after 6 April 2005 should turn to the Pension Protection Fund (PPF) to secure members’ promised benefits, rather than the FAS. However, the FAS can be relevant where a scheme entered winding up on or after 6 April 2005 but its sponsoring employer had become insolvent before that date. The eligibility requirements and the route into the FAS are prescribed in the Financial Assistance Scheme Regulations 2005, SI 2005/1986 (the FAS Regs). Eligibility criteria for schemes A...

FORTHCOMING DEVELOPMENT : Section 10 of the Finance Act 2022 is set to lift the normal minimum pension age (NMPA) from age 55 to age 57, with effect from 6 April 2028, while members of the firefighters, police and armed forces public service pension schemes are excluded from the change. The Act further provides that members of registered pension schemes may draw benefits before 57 where, on or before 4 November 2021, they already held an ‘unqualified right’ to access benefits, or were already in the midst of a substantive transfer to a scheme that, on or before 4 November 2021, conferred an unqualified right to a protected pension age of under 57. To rely upon this protection in 2028, the scheme’s rules must, as at 11 February 2021, have expressly contained an unqualified right to take entitlement to scheme benefits before reaching age 57. For additional guidance, see Practice Note: Increasing the normal minimum pension age (NMPA) to 57—pensions impact...