UK's Hutton Proposes £2B Bailout for Workers' Lost Pensions

May 24, 2006 ( - Thousands of UK workers who lost pensions when their firms went under will get £2 billion in compensation under a government deal that will benefit workers who are up to 15 years from retirement.

According to the Mirror, Work and Pensions Secretary John Hutton plans to extend the pension protection – the Financial Assistance Scheme – which now covers workers three years from retirement.

The scheme was set up in May 2004 with £400 million, but the new plan calls for a funding boost of £2.5 billion.

Two months ago, Britain’s Parliamentary ombudsman Ann Abrahams said the number of people that should be compensated stood at about 85,000, according to the Mirror.

Her announcement was followed by criticism from Prime Minister Tony Blair who said the government should not have to bear the cost of failed pensions that Abrahams estimated at £15billion (See  UK Government Will not Take Responsibility for Pension Loss ).