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How the FAS works 


 Please note that the Financial Assistance Scheme closed to Notification and Qualification of new schemes on 1 September 2016, as previously announced.

 Members currently receiving, or with a deferred entitlement to receive, assistance payments from the Financial Assistance Scheme are not affected by this change.

 In summary

  • Broadly, the FAS will top up any scheme pension that will be paid (or is already being paid) to 90 per cent of the pension an eligible member has accrued.
  • The combined total of the payments to any one member is capped to £34,229 a year (for anyone whose entitlement begins between 1 April 2017 and 31 March 2018 – different amounts apply depending on the date entitlement starts) for each scheme. The cap will be revalued on an annual basis according to the Consumer Prices Index.
  • The payments to members will be made for life from normal retirement age (but not before age 60) or from 14 May 2004, whichever is later.
  • In general, indexation is limited to accruals from April 1997 only and capped at 2.5 per cent.

As a scheme member, you may be or become eligible for payments from the FAS if you:

  • belong (or have belonged) to a pension scheme that qualifies for the FAS;
  • have a right to benefits you accrued (built-up) in the scheme; and were a member at the time the scheme began to wind-up.

In general, the FAS will pay you up to 90 per cent of the pension you accrued (built-up) in your scheme before it started to wind-up. If you left the scheme before wind-up, your pension will increase in accordance with scheme rules up to the date of wind-up.

From the wind-up date to the date you reach your scheme’s normal retirement age,  any part of your accrued pension entitled to increases in accordance with the scheme rules, will increase from wind-up date to 30 March 2011 in accordance with Retail Prices Index (RPI) (up to a maximum of 5 per cent per year). From 31 March 2011 to your normal retirement date, increases will be in accordance with Consumer Prices Index (CPI) increases (up to a maximum of 5 per cent per year).

FAS payments to members are paid for life. However, the FAS was never designed to replicate in full the arrangements of lost scheme pensions and the FAS payments you get will not necessarily cover all the different types of benefits you may have been entitled to under your original pension scheme.

We make FAS payments on top of any pension you receive from your scheme, up to a combined total of £34,229 a year for anyone whose entitlement begins between 1 April 2017 and 31 March 2018. This is called the cap. The cap applies to any pension that is, or will be, paid. So, if a member’s pension was £39,000 a year from their scheme and the scheme could not pay anything, the FAS would work out 90% of £39,000 (£35,100). But, because of the cap, the FAS will not pay more than the cap amount which applies to the member (£34,229 in this example). The cap will be revalued on an annual basis according to the Consumer Prices Index.

The cap may not apply to certain people who are in a ‘transferring’ scheme. This is a scheme where members benefits have not been fully annuitised and the scheme’s assets will transfer/have transferred to Government. If you are a member of one of these schemes, your FAS payment may be based on what your scheme could have bought for you rather than 90 per cent of your ‘accrued pension’, ie you may receive more than 90 per cent of your ‘accrued pension’ and a cap does not apply. 

As long as we have all the information we need, FAS payments will be paid from your normal retirement age (but not before age 60) or from 14 May 2004, whichever is later. Normal retirement age is the age you would normally retire at, as set out in your pension scheme rules on the date on which you ceased to accrue benefits in the scheme. This does not include any rules which allow members to retire early, or where early retirement was normally allowed but was not formally included in the rules.

If you were a member of more than one qualifying scheme, you can receive FAS payments for each qualifying scheme you had pension entitlements in. In this case, the FAS cap would be considered separately for each scheme and not on your total entitlement. Also, if you were a member of a qualifying scheme and you are the surviving spouse, civil partner or partner of an eligible member, you may also receive a FAS payment for each qualifying scheme your spouse, civil partner or partner had pension entitlements in.