26.11.2025
We welcome the government’s announcement that it intends to change the law to enable the payment of inflation increases on pre-97 pensions to PPF and Financial Assistance Scheme (FAS) members.
The government has said it will legislate to enable us to pay inflation increases – also known as indexation – up to 2.5 per cent on pre-97 compensation / assistance payments to PPF and FAS members.
This would apply to those members whose original schemes provided for indexation on pre-97 pensions. The move would broadly align pre-97 indexation rules with those already in place for post-97 pensions for PPF and FAS members.
Changing the rules on pre-97 increases could benefit more than a quarter of a million (256,000) PPF and FAS members. We've assessed that around 165,000 PPF and 91,000 current FAS members have some pre-97 benefits where their former schemes provided mandatory indexation.
Kate Jones, our Chair, said, “We warmly welcome the government’s move to change pre-97 indexation rules for PPF and FAS members. We’ve long known the impact the absence of pre-97 increases has had on affected members. It’s been important for us to support positive outcomes for, and balance the interests of, our levy payers and members. We’re pleased that members’ voices have been heard, and the government has acted positively.”
Michelle Ostermann, our Chief Executive Officer said, “This is the right time to make this change to enhance the inflation protection for our members. Twenty years on from the creation of the PPF, we’ve matured and now stand in a strong financial position. While risks do remain, we’re confident we can absorb this change without compromising the high security we provide for members’ benefits or impacting our plans to set a zero PPF levy next year.”
Sara Protheroe, our Chief Customer Officer, said, “I’d personally like to pay tribute to the member campaigners who’ve long advocated so powerfully for change. This positive move would make a meaningful difference to thousands of members’ lives. While implementing this change will be no small task, we’re fully committed to delivering this at the earliest opportunity if and when it becomes law.”
We'll continue to support the Department for Work and Pensions (DWP), and policy makers, as this amendment is considered through the remaining stages of the Pension Schemes Bill.
In parallel, a critical focus now for us will be moving forward preparatory work to be able to implement this change as soon as possible after it becomes law. We currently must apply increases to members’ payments in January each year. If the Bill becomes law next year (2026) as expected, the first opportunity to begin applying any changes to pre-97 indexation would then be January 2027. The final shape of any legislative change, as well as when the Bill becomes law, will influence the timescales for implementation.
We'll communicate this development to our members and keep them updated on progress over the coming months. When the Bill has become law, we'll be better placed to communicate directly with the members we expect will benefit from this change and to update further on our implementation plans.
