“Deprived Pensioners” are pensioners who had inflation indexation in their company schemes but have been deprived of it by the PPF system. 

This means their pensions don’t increase with inflation, which at this desperate time of rising prices and energy costs, puts them at risk of serious financial hardship.

The Deprived Pensioners are members of the Pension Protection Fund. The Fund makes compensation payments to people who were in defined benefit pension schemes where the company went bust leaving the scheme unfunded. The PPF was set up under the Pensions Act 2004 which, due to Government oversight, included the clause: ‘pensionable service prior to April 1997 shall not give entitlement to indexation’.

The outcome is that long-serving people aged below 40 will get FULL indexation (subject to cap). People aged 40-80 PARTIAL indexation. Indexation reduces with age. Those over 80 get ZERO indexation. 

"This is a deplorable and absolutely clear case of age discrimination. This is at a time of excessive PPF surplus", an issue raised at Committee by Lord Davies of Brixton, April 2, 2023

Duty of Care

The Pension Protection Fund has a Duty of Care towards its members.  Simply stated, this means that they should not allow anything to happen which might foreseeably cause damage to those members.  Damage to members caused by the pre-1997 rule will not only foreseeably cause damage: it is causing damage now and has done so for many years past.  The Fund has an obligation to its members to do whatever it can to work towards the removal of the damaging clause.  At the least, they should be lobbying government to amend the law


Our only option: 

change the law

We have appointed long-established solicitors, Edwin Coe LLP, the leading firm for class action litigation.

The DPA is working to bring an action for Judicial Review to get the law changed. For this we are working to raise £75,000. We aim to raise this money by a social media campaign, with the help of a fundraising platform: CrowdJustice.  Money transfers are by Stripe, regulated in the UK by the Financial Conduct Authority.  Donations received by Crowdjustice are transferred to a trust fund held by Edwin Coe, from which the costs of fighting the case will be met.  This money is never held by DPA

Voices calling for change

Parliament and the Press are slowly waking up to this crisis ...

UK Parliament


Origin of the indexation problem

Unless you are already well briefed on this subject, you might be baffled as to how the pre-1997 clause found its way into the legislation. The “Second Reading debate” explains this error.

Its origins reach back to 1997, when it became mandatory for defined benefit schemes to include indexation. Perhaps a naïve assumption was made that, prior to its becoming mandatory, no company schemes provided indexation. However, this is incorrect. The PPF reported that, prior to its becoming mandatory, 60% of company schemes had indexation. Source: letter from Sara Protheroe, Chief Customer Officer Pension Protection Fund, 9 February 2023.

There is no evidence that any thought was given to the issue at all. The Act should have required that the PPF respected the original indexation offering. Those whose company schemes included indexation should be granted indexation; those whose schemes did not should not. Not difficult. Failure to make this provision is the root of the present injustice.

A broken promise approved in ignorance

Hansard records the lengthy second reading debate on 2nd March 2004. The Secretary of State, Andrew Smith, opening the debate, said:

“I am clear that a pensions promise made should be a pensions promise honoured. That is why, for the first time ever, we will set up the pension protection fund to protect workers whose firms go bust without enough funds to pay their pensions.”

He then proceeded to introduce a Bill which dishonoured the pension promises made to the countless people who had had indexation in their company schemes. It seems that he did not understand what he was doing. It further seems that nobody else in the House did either.

Sir John Butterfill, who spoke several times, and was referred to by other members as being deeply knowledgeable on the Bill, said:

“The Bill does not make it clear whether the PPF will have any indexation.”

In this, of course, unfortunately, Sir John was wholly wrong, for Schedule 7 of the Bill made clear (a) that there would be indexation, and (b) that this indexation would be denied to a particular category of people – those with pensionable service prior to 1997.

What is remarkable is not that Sir John was in error, but that neither the Secretary of State, not any other Member, leaped up to correct Sir John and apprise the House of the existence of Schedule 7. One can only conclude that none of them had read it. It seems to have been a case of legislating by ignorance.

The failure in drafting Schedule 7

Can we understand what those who drafted Schedule 7 intended? We are assisted in this by two papers held in the House of Commons Library. A research paper dated 25th February 2004, before the Second Reading, stated that:

“PPF pensions in payment will be indexed in line with the Retail Price index (RPI) capped at 2.5%, but only in respect of rights built up since April 1997 (which is when the statutory obligation to index occupational pensions in payment was introduced).”

This is the linkage previously anticipated, but no justification for it is given, nor any warning of the dire consequences which would follow.

In October 2020, there was a briefing paper on the Act. This presumably took account of deliberations in committee and in the House of Lords. The explanation for the pre-1997 rule as given above was repeated, but then we are told that:

“Restricting the amount of indexation paid on PPF compensation would ensure that the PPF could do that (provide a consistent level of support) by being better able to predict its liabilities and plan ahead financially.”

As a result, promises were dishonoured, and people unfairly deprived, to save money. It doesn’t make one proud to be British. It was not even to save public money, but to help with the internal housekeeping of the PPF.

Our legal fight

Age discrimination

The Pensions Act 2004 established the Pension Protection Fund to right the wrong that pensioners suffered by the loss of their pension when the company and pension fund, to which they may have contributed for all of their working life, went bust. PPF made good some but not necessarily all the loss. The payments to be made by PPF were raised each year for inflation but not for everyone. Para 28 of Schedule 7 to the Pensions Act 2004 provides that payments made by PPF for pensionable service prior to 6 April 1997 is not indexed. Its effect is to discriminate against people on the basis of their age. Discrimination, in law, does not depend on intent. If the effect of a policy is discriminatory then, legally, that can amount to discrimination. This is what we have in the present case.

If everybody under 40 has an entitlement to indexation, people over that age get progressively less indexation, and there are 60,000 people over 80 with zero indexation, it looks, smells and tastes like age discrimination.

The primacy of Parliament

The Pensions Act is an Act of Parliament and thus a prime statute passed by Parliament. Under the British constitution Parliament is supreme but that does not mean that it can ride roughshod over human rights without consequences. This is an Act that is basically wrong in its effect on tens of thousands of pensioners. It needs correcting and that is our goal.

Counsel’s advice

As a first step in that process we have taken specialist counsel’s opinion. We cannot, on this site, discuss that advice because it is ‘privileged’, enough to say that Counsel has advised on the legal routes that we might reasonably take to challenge the discrimination in the court. No doubt challenging a primary statute is not straightforward but the prize to be gained in righting this wrong is of huge significance to the pensioners affected.