Pension Protection Fund compensation cap ‘must be disapplied’ – DWP’s appeal dismissed


In a judgement handed down today, the appeal by the UK Government over the lawfulness of a cap on Pension Protection Fund compensation was dismissed. This means that the cap must be removed for affected members.

On Twitter, a post by the @PPF, Pension Protection Fund, read: “The Court of Appeal has now published the outcome of the Hughes judicial review and supported our approach for increasing payments to PPF & FAS members.

“It’s also confirmed that the PPF compensation cap must be disapplied.”


The post also directed Twitter users to more information on the PPF website.

“The Court of Appeal has supported our approach for increasing payments to PPF and FAS members following the 2018 European Court of Justice judgment in the Hampshire case,” it read.

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“It has also confirmed the High Court’s decision that the PPF compensation cap, as set in legislation, is unlawful based on age discrimination and has to be disapplied.

“However the period of time over which the cap has to be disapplied is not yet clear, and as such, the Secretary of State for Work and Pensions has asked for more time to address the Court on this complex legal issue.

“We also don’t yet know whether the respondents or DWP will want to appeal.


“So for now we’ll continue to pay members their current level of benefits.


“We’ll provide more information on the implementation of the judgment as soon as we’re able.”


The PPF is a statutory fund in the UK, which is intended to protect members if their define benefits pension fund becomes insolvent.

The compensation cap is used to assess the level of compensation that the PPF pays to individuals.

From April 1 each year, the compensation cap is reviewed to reflect the rise in the general level of earnings in Great Britain since the previous tax year.


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