The Financial Assistance Scheme (FAS) helps people whose final salary scheme failed between 1997 and 2005; it runs apart from the Pension Protection Fund.

If an old employer's pension collapsed, whether the Pension Protection Fund or the Financial Assistance Scheme applies turns on when the scheme began to wind up, not on how large the loss was. Below: who the FAS reaches, how a payment is built and what the Pension Schemes Act 2026 changes. Your own figures decide how FAS assistance sits beside State Pension and savings; a quick form on this page arranges a callback from an FCA-authorised adviser firm, with nothing to pay.

Two safety nets, set up at different times

The Pension Protection Fund (PPF) steps in with compensation when a sponsoring employer becomes insolvent; its rules are in the PPF explainer. The FAS is the older, closed arrangement for schemes that failed before the PPF could help. According to the PPF, it makes payments to members of defined benefit schemes who lost some or all of their pension when the scheme came to an end between 1 January 1997 and 5 April 2005.

The government announced the FAS in May 2004 and it began operating in September 2005. The government pays for it through the Department for Work and Pensions, and since 2009 the PPF has administered it day to day; section 286 of the Pensions Act 2004 forbids a levy to fund it. The PPF's page, read on 20 October 2026, counts 136,000 members. The FAS takes no new members: applications from schemes closed in 2016.

The payments help replace expected retirement income but will not necessarily cover every benefit the old scheme promised. See also are final salary pensions protected? and what a final salary pension is.

Which schemes qualify, and how to check

The Financial Assistance Scheme Regulations 2005 (SI 2005/1986) set the tests. In outline, an occupational scheme qualifies where:

  • immediately before winding up it was "neither a money purchase scheme" nor one of the kinds excluded by regulation 10, so a defined contribution scheme does not qualify;
  • the winding up began between 1 January 1997 and 5 April 2005, with narrower provisions for some later winding-ups (for example some that began after 5 April 2005 where the employer's insolvency came earlier); and
  • the employer test is met. For a single-employer scheme the main test is "that an insolvency event has occurred in relation to the employer". Alternatively, for a single-employer scheme that began winding up before 11 June 2003, the condition can be met if the employer paid off the debt it owed the scheme, or none was due.

That is an outline, not a ruling on any one scheme. If you believe you should be a member but have not been contacted, the PPF points you to the Pension Tracing Service. Existing members can reach the FAS on 0330 678 0000, from 9.00am to 5.30pm, Monday to Friday, or by post at PO Box 287, Wymondham, NR18 8EZ. For what a statement from a former employer's scheme shows, see deferred final salary pensions.

How much the FAS pays, and from when

The starting point is the member's expected pension: broadly, what was built up in the old scheme before it began to wind up, revalued to the FAS normal retirement age. The PPF's July 2024 booklet "When you retire", which calls itself simplified, puts the entitlement at "a maximum of 90 per cent" of that figure, reduced if it is higher than the FAS cap; Schedule 2 to the Regulations applies the same 0.9 multiplier. What is then taken off depends on the kind of member:

  • Top-up member. The old scheme secured benefits before it wound up, perhaps by buying an annuity, transferring the funds or paying a lump sum. The 90 per cent figure is reduced by the value of those benefits; if they are worth more, no top-up is due.
  • Single payment member. The funds were transferred into the FAS. You get "the higher of two amounts": standard assistance (the capped 90 per cent figure, less benefits already paid out for you) and a notional pension, based on what the scheme could have afforded to pay you.

The cap. Regulation 17AA sets the FAS cap at a standard amount for someone with 20 or fewer years of pensionable service. Each whole year above 20 adds 3% of that amount, but the addition can never exceed the standard amount itself, so the cap at most doubles. Schedule 2 started the standard amount at £26,000 for entitlement before 1 April 2007 and has raised it with prices from April 2011, so older figures are out of date. Most members are not affected by the cap; details are on the FAS member website.

When payments start. The FAS takes the scheme's own normal retirement age but clamps it under regulation 2: above 65 it counts as 65, and below 60 it counts as 60. Payments begin at that date and can start earlier only on grounds of ill health. They cannot be deferred beyond it; late claims are backdated to it.

Where FAS assistance fits beside your other pensions and savings is worth talking through: an FCA-authorised adviser rings back, without charge, when the form on this page arrives carrying your phone number.

What the 2026 Act changes for pre-1997 service

Every January, the increasing parts of a FAS payment rise by inflation, up to 2.5 per cent. In general that has meant service after 5 April 1997; the PPF's increases page says standard assistance for service before 6 April 1997 has historically not increased. Section 111 of the Pension Schemes Act 2026 (Royal Assent 29 April 2026) amends the 2005 Regulations so that pre-1997 standard assistance can increase too, for two groups:

  • members whose old scheme's rules required pre-1997 pension in payment to increase, where that requirement was not only about guaranteed minimum pensions: in most cases the whole pre-1997 part can increase (around 85,000 FAS members, by the PPF's count);
  • members whose scheme provided a guaranteed minimum pension built up between 6 April 1988 and 5 April 1997: only a "relevant percentage" of the pre-1997 part, which the Secretary of State will set and which, the PPF says, the government has not yet confirmed (around 27,000 FAS members). See what a guaranteed minimum pension is.

Members paid a notional pension rather than standard assistance are outside both groups: their increases still depend on what the old scheme could have afforded. Nothing will be backdated.

Section 111 is not yet in force: legislation.gov.uk marks it "not in force at Royal Assent", and the Act's commencement provision leaves its start to regulations made by the Secretary of State. The PPF expects the first increases to be payable from 1 January 2027 for the first group and 1 January 2028 for the second, and says it has written to or emailed every eligible member. Increases paid by schemes still running are covered in do final salary pensions increase?

Questions about the FAS

Does the FAS pay as much as the PPF?

The FAS pays up to 90 per cent of expected pension, subject to its cap; the PPF's compensation levels are set out in the explainer.

Can I take a lump sum from the FAS?

Top-up members cannot take tax-free cash from the FAS, though one may be available from an annuity the old scheme bought. A single payment member may be able to take part of the entitlement as tax-free cash when payments start, and the ongoing annual payments are then reduced. If any cash is invested, its value can fall as well as rise and you may get back less than you put in.

Are FAS payments taxable?

Yes. The booklet says they are "regarded as earned income, which means you have to pay tax on them". They could also affect state benefits such as Pension Credit and Housing Benefit, but not the State Pension or other pensions.

Who receives FAS payments after a member dies?

An eligible spouse or civil partner always does. An unmarried partner who lived with the member as if married qualifies only where the old scheme's rules allowed it, and children can qualify in defined circumstances. The PPF's equivalent is covered in PPF death benefits.

Your next step

Your exact FAS figure comes from the FAS itself. Asking is your decision. The quick form on this page takes about two minutes, is free, and afterwards a telephone call comes from an FCA-authorised adviser firm.

Sources: PPF, What being a FAS member means, When you retire (FAS booklet), Will my payments increase?, pre-97 indexation and contact us; Pensions Act 2004, section 286, Financial Assistance Scheme Regulations 2005, Pension Schemes Act 2026, section 111 and section 133.