Government rethinks protection for stakeholder pension holders

The Government looks set to rethink its plans for providing protection for workers whose company pension schemes collapse.

The House of Lords has backed an amendment, which would require companies with schemes deemed more likely to collapse to contribute more to the pension protection fund (PPF).

Peers ruled that the contribution should be adjusted from 50 per cent to 80 per cent.

Under current proposals likelihood of collapse and the size of the fund are given equal weighting when calculating a company's contribution.

The development is the latest challenge to the Government's proposals to protect workers from losing their stakeholder pensions.

Ministers have already been forced to make provisions for people who have already lost their pensions as well as those who may lose them in the future.

Business leaders are thought to be in support of the proposed adjustment.