How British Steel Pension Changes Are Going to Affect You

There are thousands of ex-steelworkers in Teesside that need to now their options before the vote takes place which could see them losing even more in their pension pots moving forward.

British Steel Pension Scheme members are currently being asked to make a decision between two options when it comes to their pensions. This has happened after Tata Steel managed to separate itself from the scheme successfully only weeks ago.

The Facebook Support Group for British Steel Pension Scheme members has grown to more than four thousand and their concern is that they could see a major drop in their pensions, with Tata and Corus workers losing more than they may think being completely unaware of the risks involved in their decision.

Pensions Frozen to 40% Cut in Lifetime Income

Those who retired prior to 1997 are going to be the hardest hit and their pensions will basically be frozen and pensions who are aged sixty will see a cut of approximately forty percent of their lifetime pension, which is a drastic reduction to live on moving forward.

What is really going on?

Tata Steel UK did ask the Pension Regulator for a separation to alleviate the pensions liability that it had, which was massive to say the least, this way originally inherited from British Steel amounting in exceeds of £15 billion.

In 2016 Tata advised that the British Steel Pension Scheme was larger than Tata Steel UK pension scheme, putting the business and the scheme at risk and they needed to find an outcome that was suitable to keep the business going and reduce the risk of thousands of people in Teesside losing their jobs as a result. Of course this resulted in members agreeing to the changes in order to keep their jobs without fully understanding the overall outcome.

At this moment in time there is about one hundred and thirty thousand members who are being affected by the British Steel Pension Scheme decision, eighty thousand of these members are already retired.

The pensions regulator did agree to restructuring the pension scheme and the British Steel Pension Scheme has now been separated from Tata Steel UK as a result. This means that Tata Steel UK remains in business without members losing their jobs and they pay the pension scheme a set agreed sum of £550 million, which is more than what would have been paid out had the company filed for insolvency as a result.

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