Each year our compensation cap for PPF members is subject to review by the Department of Work and Pensions, with changes taking effect from 1 April.
If you were under your normal pension age when your scheme entered our assessment period, there is a cap on the total amount of annual compensation we can pay to you. Only around 0.5% of our members are affected by the compensation cap, which means the vast majority of members aren’t affected.
From the 1 April 2020, the cap at age 65 has been set at £41,461. This is an increase of 3.6% from the 2019/20 cap which was £40,020. The increase reflects the level of wage inflation over the period. As the cap is applied before your compensation is reduced to 90% of our levels, the actual amount you would receive as a capped member retiring at 65 is £37,315.
The new cap will be increased for the majority of members that retire from 1 April 2020 onwards. The later you retire, the higher the annual cap is set, as you’ll be receiving payments for a shorter period of time.
If you’re already receiving payments from us these changes do not affect you, they only impact your compensation if you haven’t retired yet.
There is a cap on the amount of expected pension we can take into account when we work out your assistance. Only a small proportion of our members are affected by the cap, which means the vast majority of members aren’t affected.
From 1 April 2020, the cap has been set at £36,717. This is an increase of 1.7% from the 2019/20 cap which was £36,103. The increase reflects the level of inflation over the period.
The new cap will apply to all members retiring on or after 1 April 2020 (if you’re already receiving payments from us these changes do not affect you).