Are you part of a failed final salary pension scheme? Your income could be about to rise

Natasha Clark
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A picture taken 17 April 2007 in London...
Some pensioners are expected to get a three per cent boost on their incomes from next April (Source: Getty)

Pensioners involved in failed final salary schemes will receive a boost in their incomes from next year, the government has said.

The Pension Protection Fund safeguards final salary schemes if employers fail and they cannot provide the money to employees they were promised. But anyone who is an early retiree, or who is not yet retired is subject to a cap if their payments exceed £37,000 at aged 65.

The "long-service" cap, which adds three per cent to the income of pensioners who were affected, was introduced in 2014, but has not yet been rolled out. Thousands are thought to have missed out on chunks of their income due to the delays.

But Richard Harrington, the pensions secretary, has launched a consolation on the plans, and said he expects it to be brought in next April, The Telegraph reported.

A report from Aon Hewitt this morning found workers in the UK are under saving for their retirement by £11bn per year.

Just 16 per cent were said to be saving enough to maintain their current standards of living, the report said.

Read more: A Tory MP has hinted that the government intends to carry out a pension tax shake-up

Meanwhile, last week it was reported that the state pension could be on the rise again after a report from the Confederation of British Industry (CBI) delivered findings to the government which expressed concern at providing a "universal approach".

Read more: Young people urged to save more for their pensions

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