Pension Protection Fund: What Happens to Your Pension?

Which pensions does the PPF protect?

The PPF protects eligible defined benefit schemes, such as certain final salary and career average arrangements. It does not cover defined contribution pots or public sector pension schemes. Eligibility depends on the scheme and circumstances, not simply on the word “pension”.

The PPF publishes a scheme search covering schemes being assessed and those transferred to it. Check the exact scheme name and status; assessment is not the same as completed transfer.

Source: PPF — who we protect and scheme search.

Why people refer to 90% and 100% compensation

For someone below their scheme’s normal pension age when the assessment period began, compensation is generally based on 90% of the pension value at employer insolvency. That is a starting basis, not a calculation of the eventual payment after revaluation, retirement timing or cash choices.

The member booklet explains that people already retired generally retain their payment level, but early retirees below the scheme’s normal pension age at insolvency may be treated differently. Ill-health retirement and pensions paid following a death have separate protection. Use your PPF statement to establish your category rather than assuming that anyone receiving a pension gets the same treatment.

Source: PPF — current member booklet.

The former compensation cap is not a current cash ceiling

The PPF says it no longer restricts compensation using its former compensation cap following the 2021 Court of Appeal judgment. Older articles quoting a maximum annual payment can therefore mislead.

Removing that cap does not remove the other compensation rules. The 90% basis, retirement factors and treatment of different service periods are separate questions.

Source: PPF — retirement and compensation cap FAQs.

Separate increases before retirement from increases in payment

Deferred compensation can be revalued before retirement. Once in payment, compensation for service from 6 April 1997 normally receives annual CPI-linked increases capped at 2.5%. These are different mechanisms, so a single inflation percentage applied to the whole pension is not a reliable model.

For example, a hypothetical £4,000 component eligible for a full 2.5% increase would rise by £100 a year. That does not establish the increase on the rest of the compensation or a part-year payment.

Source: PPF — retirement and payment increases.

Pre-1997 increases: a current change to check

The Pension Schemes Act 2026 permits future pre-1997 increases for eligible members whose original scheme provided mandatory increases. It does not provide backdated payments for past years without increases.

As checked on 12 September 2026, the PPF expects the first increases on 1 January 2027 for eligible schemes with mandatory pre-1997 increases beyond post-1988 Guaranteed Minimum Pension (GMP). For schemes with increases only on post-1988 GMP, it expects the first increase on a defined proportion from 1 January 2028; the government has not yet confirmed that proportion.

Eligibility and implementation dates need the current PPF communication. Do not assume that every pre-1997 component will rise or that an older statement already incorporates the change.

Source: PPF — latest pre-1997 indexation implementation.

Your statement checklist

Use your statement to work through these details before contacting the administrator or PPF.

• Exact former scheme name and whether it is in assessment or has transferred.
• Normal pension age for each part and the compensation category used.
• Statement date and whether amounts are current payments or future illustrations.
• Pre-1997 and later service components, and which receive increases.
• Any letter about eligibility for the new pre-1997 increases.
• Retirement date, cash option and survivor benefits assumed in an illustration.
• Gross payment, tax deducted and bank receipt kept as separate figures.

Use the official member service for your own figures

The PPF member service provides statements, payment information and retirement illustrations. Use the official website below for account access or personal queries.

If a figure differs from the former scheme’s statement, ask which compensation rule or assumption explains the difference. Keep both dated documents so the comparison can be checked.

Source: PPF — membership and official account access.