Pension Protection Fund says 66,000 members will not receive increases until at least January 2028

Some 66,000 pensioners who were promised inflation-linked increases to their retirement payouts have been told they must wait at least an additional year before receiving them.

The Pension Protection Fund, which administers payments for members of collapsed workplace pension schemes, has confirmed it cannot meet the January 2027 deadline originally envisaged for these individuals.

Citing the complexity of the required calculations and its "finite resources," the PPF has opted to split delivery of the uplifts into two phases.

Whilst roughly 265,000 members will see their payments rise from the start of 2027 as planned, the remaining 66,000 will not receive their increases until January 2028 at the earliest.

The announcement has provoked fury among campaigners, who accuse the Government of dragging its feet whilst retirees suffer.

The PPF and the Financial Assistance Scheme were both established by the Government to compensate members of failed workplace pension schemes.

The FAS covers pensions from schemes that collapsed between January 1997 and April 2005, with the PPF taking responsibility for those that failed thereafter.

Pension entitlements accrued after 1997 were already eligible for inflationary uplifts, but any years built up before that date received no such protection.

That pledge was set to boost around 265,000 PPF and FAS members from January 2027, marking what the Government described as the most significant change to pension compensation in more than two decades.

A separate group of 66,000 members, however, found themselves in a different position.

Their entitlement to inflationary increases related solely to their Guaranteed Minimum Pension — a distinct component of their workplace pension arising from "contracting out" of the additional state pension.

Under contracting-out arrangements, workers and their employers paid reduced National Insurance contributions.

In exchange, employers were obliged to deliver pension payments at least equivalent to the extra state pension foregone.

Crucially, employers were also required to uplift this additional element in line with inflation, subject to a cap of three per cent annually.

Neither the PPF nor the FAS currently provides this protection.

Ms Reeves's Budget announcement committed to extending inflation-linked rises to these GMP entitlements too, but the PPF has determined that the administrative burden of these particular calculations makes a 2027 delivery impossible.

Maurice Alphandary, a PPF member who heads the AEA Technology Pensions Campaign, said: "This gives further credence to the message that the Government clearly wants to send out, which is delay, deny until they die."

He accused ministers of prioritising Treasury savings over the welfare of pensioners who had earned their entitlements.

"It's disgusting. They've already agreed a course of action and now they're backtracking," he added.

Fellow campaigner Andrew Turner described the news as another "slap in the face" that stripped retirees of their rightful pension benefits.

Terry Monk, member of the Pensions Action Group, was equally scathing.

"It's loose change and people are dying waiting," he said, adding that he held the Department for Work and Pensions responsible rather than the PPF itself.

Mr Monk reserved particular praise for the PPF's efforts, saying: "I have immense respect for the PPF, what they're doing and how quickly they're doing it.

"I don't have the same respect for the Department for Work and Pensions, who created the regulations and won't listen."

A PPF spokesman defended the phased approach, stating: "We believe this phased approach is the most effective way to deliver these important changes successfully for everyone affected."

A Government spokesman maintained that the reforms represented the most substantial overhaul of pension compensation in over twenty years, benefiting more than 250,000 members.

Ms Reeves's Budget announcement applied inflationary uplifts only going forward, with no provision for backdated arrears.

That decision alone locked in losses estimated at up to £150,000 for some of the worst-affected members.