Latest news with #AEATechnology
Yahoo
05-04-2025
- Business
- Yahoo
‘We're facing £80k pension shortfalls because government misled us'
Has your pension been affected by privatisation? Get in touch money@ Andrew Turner dedicated his career to the Government's atomic energy programme, working on everything from electric car batteries to decontaminating nuclear waste. But years later, the 73-year-old is struggling to make ends meet – a consequence MPs have blamed on 'misleading' government advice. Mr Turner and his colleagues are on course to lose an average of £80,000 from their private pensions as inflation takes a chunk out of everything they worked for. They were scientists at AEA Technology, formerly the commercial arm of the UK Atomic Energy Authority. Focusing on areas such as nuclear engineering and environmental consultancy, the work was highly skilled and vital in a rapidly changing world. Talented people were hoovered up, often straight from university, and put to work on technologies like nuclear fusion. They were offered a final salary pension, promising an income in retirement that would rise with RPI inflation and be guaranteed by the state. But in 1996, everything changed. AEA Technology was privatised and workers were transferred to the newly formed AEA Technology plc. They were offered three choices for their pensions – leave them where they were, transfer to a private personal fund or take them into the new company. Given the scheme was based on final salary, the highest of which usually comes at the end of a career, it seemingly made financial sense to choose option three – and around 90pc of members did. After all, legislation stipulated that the new pension scheme must be 'no less favourable' than the existing one. The Government Actuary's Department – a professional body independent of the scheme – advised members that the new benefits would be identical, or very close, to their old ones and that transferring was 'likely' to increase their pension. It also assured them that it was unlikely either scheme would fail. However, there was one scenario the advice did not cover – insolvency. In 2012, AEA Technology plc entered administration and its pensions were eventually moved into the Pension Protection Fund. This meant one thing: lower payouts in retirement. Mr Turner still recalls the letter landing on his doormat. He now gets just £18,000 a year from a pension that should pay £29,000. He said: 'It was a shock. We knew the company wasn't doing that well as they were selling off bits and laying people off. But the rug had been pulled from under our feet. 'We've got a 14-year-old car, we haven't been abroad for a few years, we don't always have the heating on. When retiring on that initial pension, there's an opportunity for a satisfying retirement, exploring new things. That's progressively become more and more limited. 'The other thing is my wife is nine years younger than me. If I'm only getting £18,000 at 87 and I die, my wife will only get £9,000. That's troubling.' Richard Lee, 69, worked at AEA Technology for 25 years, but his pension is just over half of what it should be – and it will keep falling in real terms. He said: 'I'm getting about a 40pc drop. That'll get worse with time. It's more than annoying with the cost of living and rising bills. 'There's going to be a time when ends don't meet.' The Pension Protection Fund steps in to pay pensions when a defined benefit scheme goes bust. However, inflationary rises before 1997 aren't honoured and any post-1997 are capped at 2.5pc. As a result, pensions can fall as low as half of the amount someone was promised. For those with lengthy service before 1997, it is having a devastating effect, particularly when inflation soars. That has developed into an understandable sense of outrage, directed not at the Pension Protection Fund but at those they feel misled them – the Government. Unlike their old scheme, the new one did not come with a government guarantee that pensions would be maintained – something they are adamant they were not told. Mr Turner said: 'All the communications that we had about the pension scheme implied that the new scheme would be exactly the same as the UK AEA Technology one, and they never said they were removing the Treasury guarantee. 'That was a real sort of sense of betrayal when we discovered that wasn't the case.' Mr Lee added: 'We'd been given the impression that the pensions would be protected by the privatisation legislation. It feels like we've been lied to.' Their view is supported by an independent 2023 report from the Public Accounts Committee, which concluded that 'scheme members had reason to believe the new scheme would be similarly protected, and none of the information government provided indicated this was not the case.' Though welcome, however, this vindication doesn't protect their pensions. The AEA Technology Pensions Campaign has spent the past 13 years fighting for justice. The members have met several MPs and ministers, and written to countless others. They've approached two ombudsmen, to no success, and taken legal advice. Maurice Alphandary, 70, a former chemical engineer, has been running the campaign for the past two years. He said if he lives to the average life expectancy of 87, he will have received £100,000 less than he should have. He said: 'Sadly, lots of our colleagues are dying as time goes by. What's annoying is the way that the Government has shafted us. 'To us, it's every bit as big a scandal as the infected blood, the Post Office.' Former Cabinet minister Oliver Letwin said in 2015 that the pensioners had been misled and called for an investigation, as did ex-minister Ed Vaizey the following year. Other MPs and the trade union Prospect have added their voices. In 2023, the Public Accounts Committee concluded that 'incomplete information' from the Government directly led to members losing money. It recommended increasing payments from the Pension Protection Fund by inflation and asked for an independent review of the members' complaints, with both calls supported by MPs on the Work and Pensions Select Committee. The Government, however, disagreed on both counts. At the start of 2024, then pensions minister Paul Maynard offered warm words, but any progress was quickly lost to the subsequent General Election and change of government. Towards the end of 2024, the Department for Work and Pensions (DWP) asked the Pension Protection Fund, which has a £13bn surplus, how much inflationary increases would actually cost. However, no plans have been announced. A DWP spokesman said: 'We are aware of concerns raised around Pension Protection Fund compensation for members of the AEA Technology pension fund and others. 'We are reviewing recommendations made by the Work and Pensions Select Committee, including on indexation of pre-1997 defined benefit pension schemes and will respond in the coming months.' One small mercy is that following the Fair Deal policy, introduced in 2013, all pensions are now expected to remain in public sector schemes in the event of privatisation. It means this situation is unlikely to be repeated. However, this will be of little comfort to those whose time is running out. Of around 1,250 who were initially affected, just 1,000 remain. It is for them, and the families of those who have passed away, that the fight goes on. Mr Lee said: 'We're working as a group. You can't do it as an individual. I think it takes a toll. 'I think the phrase is deny, delay until they die. That's been an expression used by others in this campaign. They deny responsibility, they delay decisions until we die.' Mr Alphandary added: 'It's hope, it's faith, it's anger. Give us back what we paid for – or actually, give us what you stole from us. 'We'll keep going. We owe it to our families and the other pensioners.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
05-04-2025
- Business
- Telegraph
‘We're facing £80k pension shortfalls because government misled us'
Has your pension been affected by privatisation? Get in touch money@ Andrew Turner dedicated his career to the Government's atomic energy programme, working on everything from electric car batteries to decontaminating nuclear waste. But years later, the 73-year-old is struggling to make ends meet – a consequence MPs have blamed on 'misleading' government advice. Mr Turner and his colleagues are on course to lose an average of £80,000 from their private pensions as inflation takes a chunk out of everything they worked for. They were scientists at AEA Technology, formerly the commercial arm of the UK Atomic Energy Authority. Focusing on areas such as nuclear engineering and environmental consultancy, the work was highly skilled and vital in a rapidly changing world. Talented people were hoovered up, often straight from university, and put to work on technologies like nuclear fusion. They were offered a final salary pension, promising an income in retirement that would rise with RPI inflation and be guaranteed by the state. But in 1996, everything changed. AEA Technology was privatised and workers were transferred to the newly formed AEA Technology plc. They were offered three choices for their pensions – leave them where they were, transfer to a private personal fund or take them into the new company. Given the scheme was based on final salary, the highest of which usually comes at the end of a career, it seemingly made financial sense to choose option three – and around 90pc of members did. After all, legislation stipulated that the new pension scheme must be 'no less favourable' than the existing one. The Government Actuary's Department – a professional body independent of the scheme – advised members that the new benefits would be identical, or very close, to their old ones and that transferring was 'likely' to increase their pension. It also assured them that it was unlikely either scheme would fail. However, there was one scenario the advice did not cover – insolvency. In 2012, AEA Technology plc entered administration and its pensions were eventually moved into the Pension Protection Fund. This meant one thing: lower payouts in retirement. 'We've had the rug pulled from under us' Mr Turner still recalls the letter landing on his doormat. He now gets just £18,000 a year from a pension that should pay £29,000. He said: 'It was a shock. We knew the company wasn't doing that well as they were selling off bits and laying people off. But the rug had been pulled from under our feet. 'We've got a 14-year-old car, we haven't been abroad for a few years, we don't always have the heating on. When retiring on that initial pension, there's an opportunity for a satisfying retirement, exploring new things. That's progressively become more and more limited. 'The other thing is my wife is nine years younger than me. If I'm only getting £18,000 at 87 and I die, my wife will only get £9,000. That's troubling.' 'I've had a 40pc drop – and it will get worse' Richard Lee, 69, worked at AEA Technology for 25 years, but his pension is just over half of what it should be – and it will keep falling in real terms. He said: 'I'm getting about a 40pc drop. That'll get worse with time. It's more than annoying with the cost of living and rising bills. 'There's going to be a time when ends don't meet.' The Pension Protection Fund steps in to pay pensions when a defined benefit scheme goes bust. However, inflationary rises before 1997 aren't honoured and any post-1997 are capped at 2.5pc. As a result, pensions can fall as low as half of the amount someone was promised. 'We feel betrayed' For those with lengthy service before 1997, it is having a devastating effect, particularly when inflation soars. That has developed into an understandable sense of outrage, directed not at the Pension Protection Fund but at those they feel misled them – the Government. Unlike their old scheme, the new one did not come with a government guarantee that pensions would be maintained – something they are adamant they were not told. Mr Turner said: 'All the communications that we had about the pension scheme implied that the new scheme would be exactly the same as the UK AEA Technology one, and they never said they were removing the Treasury guarantee. 'That was a real sort of sense of betrayal when we discovered that wasn't the case.' Mr Lee added: 'We'd been given the impression that the pensions would be protected by the privatisation legislation. It feels like we've been lied to.' Their view is supported by an independent 2023 report from the Public Accounts Committee, which concluded that 'scheme members had reason to believe the new scheme would be similarly protected, and none of the information government provided indicated this was not the case.' Though welcome, however, this vindication doesn't protect their pensions. 'The Government has shafted us' The AEA Technology Pensions Campaign has spent the past 13 years fighting for justice. The members have met several MPs and ministers, and written to countless others. They've approached two ombudsmen, to no success, and taken legal advice. Maurice Alphandary, 70, a former chemical engineer, has been running the campaign for the past two years. He said if he lives to the average life expectancy of 87, he will have received £100,000 less than he should have. He said: 'Sadly, lots of our colleagues are dying as time goes by. What's annoying is the way that the Government has shafted us. 'To us, it's every bit as big a scandal as the infected blood, the Post Office.' Former Cabinet minister Oliver Letwin said in 2015 that the pensioners had been misled and called for an investigation, as did ex-minister Ed Vaizey the following year. Other MPs and the trade union Prospect have added their voices. In 2023, the Public Accounts Committee concluded that 'incomplete information' from the Government directly led to members losing money. It recommended increasing payments from the Pension Protection Fund by inflation and asked for an independent review of the members' complaints, with both calls supported by MPs on the Work and Pensions Select Committee. The Government, however, disagreed on both counts. 'Deny and delay' At the start of 2024, then pensions minister Paul Maynard offered warm words, but any progress was quickly lost to the subsequent General Election and change of government. Towards the end of 2024, the Department for Work and Pensions (DWP) asked the Pension Protection Fund, which has a £13bn surplus, how much inflationary increases would actually cost. However, no plans have been announced. A DWP spokesman said: 'We are aware of concerns raised around Pension Protection Fund compensation for members of the AEA Technology pension fund and others. 'We are reviewing recommendations made by the Work and Pensions Select Committee, including on indexation of pre-1997 defined benefit pension schemes and will respond in the coming months.' One small mercy is that following the Fair Deal policy, introduced in 2013, all pensions are now expected to remain in public sector schemes in the event of privatisation. It means this situation is unlikely to be repeated. However, this will be of little comfort to those whose time is running out. Of around 1,250 who were initially affected, just 1,000 remain. It is for them, and the families of those who have passed away, that the fight goes on. Mr Lee said: 'We're working as a group. You can't do it as an individual. I think it takes a toll. 'I think the phrase is deny, delay until they die. That's been an expression used by others in this campaign. They deny responsibility, they delay decisions until we die.' Mr Alphandary added: 'It's hope, it's faith, it's anger. Give us back what we paid for – or actually, give us what you stole from us. 'We'll keep going. We owe it to our families and the other pensioners.'
