Commons Sense

House of Commons · Ministers' Questions

Indexation of Pension Rights

Monday 27 October 2025 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Pensioner associations highlight unintended consequences of the Pensions Act 1995 affecting pre-1997 pensioners in multinationals.
  • A constituent of Helen Morgan contacted her regarding financial hardship faced by pensioners who accrued pensions before 1997.
  • The Pensions Regulator advises trustees to consider pensioners who are not receiving inflation-linked increases.

Topics (select to filter)

Questions & Answers

Q1 Nia Griffith Lab Llanelli
Benefits & Welfare
Context

Due to legal changes made by the Pensions Act 1995, companies like 3M and Hewlett Packard were allowed to stop paying indexation to pensioners who accrued their rights before April 1997. This has led to hardship for individuals despite healthy funds.

Question

As a result of the efforts of pensioner associations, we know that there have been unintended consequences of the Pensions Act 1995, which made it legal to stop payment of indexation to pre-1997 pensioners in successful multinationals such as 3M and Hewlett Packard. Their pensions have already been frozen for at least 15 years despite healthy funds and trustees' pleas. What will the Minister do to stop this dishonourable practice, so that these companies deliver the financial security they promised?

Answer from The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)

I recognise the issue raised: any individual in this situation would want those pension increases to continue. Scheme rules govern when inflation-linked increases can be paid, and they are not changed retrospectively. However, the Pensions Regulator has advised trustees to consider those who are not receiving inflation-linked increases when making decisions, and should also take into account historical awards made—particularly in cases like those highlighted by my hon. Friend.

Partly answered

Not addressed: The Minister did not commit to any legislative steps or specific actions but acknowledged the issue and referenced existing guidelines for trustees.

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Q2 Helen Morgan Lib Dem North Shropshire
Benefits & Welfare
Context

A constituent has contacted the MP, stating that after working for Hewlett Packard and accruing pension rights before April 1997, they are facing real financial hardship due to lack of indexation. This affects about 50,000 members in total.

Question

I have been contacted by a constituent who worked with her husband at Hewlett Packard. They accrued their pensions before 1997 and now face real financial hardship along with about 50,000 other members of the Pre-97 Alliance. In ten years' time, their pensions will be nearly worthless. Will the Minister not consider legislating to ensure these individuals are not left in poverty having been promised proper pensions?

Answer from The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)

I understand the powerful case made by Members on both sides of the House, including regarding Hewlett Packard. These decisions must be in line with scheme rules, but no one wants pension savers to see the value of their pensions diminish over time. I hope that employers and trustees will take this situation seriously.

Partly answered

Not addressed: The Minister did not commit to legislative action but acknowledged the seriousness of the issue and hoped for a positive outcome from scheme rules adherence.

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