Paragraphs 26 and 27 of Schedule 7 of the Pensions Act 2004 set out the circumstances in which the compensation cap applies and how and when it should be increased. In July 2021 the Court of Appeal ruled the PPF compensation cap was unlawful on the grounds of age discrimination, so we’re no longer applying it and we’re removing it from affected PPF pensioners.
The information below is provided for advisers who still need to refer to previous calculation tables and factors.
The compensation cap was also used in valuation calculations required under Sections 179 and 143 of the Pensions Act 2004. You can find out more about how it was applied under these sections in our valuation guidance section.