The government is poised to hand miners £2.3bn before the end of the year, a sector pension scheme has confirmed
Labour to dip into reserve fund to pay 40,000 state pensioners £55,000(Image: C T Aylward via Getty Images)
The Labour government is set to tap into reserve funds to provide 40,000 pensioners with payments of up to £55,000 each. The administration is preparing to distribute £2.3bn to miners before year-end, according to confirmation from a sector pension scheme.
These funds are currently held within the British Coal Staff Superannuation Scheme’s (BCSSS) investment reserve fund, a government-controlled pot designed to shield taxpayers from covering 40,000 pensions. The transfer could deliver eligible retirees an average of up to £55,000 each.
Pensions consultant John Ralfe commented: “Under current rules, the £2.3bn will be repaid to taxpayers in 2033, which amounts to a post-dated cheque. Why should we tear up that cheque and instead give £2.3bn of taxpayers’ money to the members?”, reports Birmingham Live. “If we do, this means there is no cushion to meet any future deficits, so taxpayers will have to write cheques to plug the gap, potentially for decades.
“This also ramps up things for Rachel Reeves – the person making the decision. Every day there is a possible new tax wheeze floated. If this money is given away, that’s another £2.3bn she will have to raise through taxes.”
A DESNZ spokesman stated: “Minister Jones recently met with Trustees of the BCSSS and is talking to the Treasury about their proposals. We will provide an update in due course.”
The chair of the scheme, Cheryl Agius, stated: “I believe that we are now close to what I hope will be a complete and lasting resolution to this issue. Sarah [Jones] told us that she has now made a recommendation to HM Treasury regarding the investment reserve transfer to members.
“She is unable to share the details until HM Treasury responds to her proposal, but she is happy for her team to work closely with the Trustees over the summer to prepare for a possible transfer.”
We have a dedicated newsletter for ChronicleLive’s money-saving and cost of living stories. It’s free and you can sign up to receive it here. It will keep you up to date with all the latest money news and budgeting tips as well as stories on the cost of living crisis in our region.