The Association of British Insurers (ABI) has welcomed the news that the government is committed to offering a substantial rescue package to those whose workplace pensions schemes collapsed.

Maggie Craig, director of life and savings at the ABI, said that the government’s announcement earlier this week is “good news” for the 125,000 who lost out on their pension savings.

The government announced that the Financial Assistance Scheme (FAS) is to be extended to guarantee 90 per cent of the money saved in schemes that went bust.

“The decision to use a mixture of FAS assets and government funding is the right way forward,” Ms Craig stated.

Making the announcement, work and pensions secretary Peter Hain said that people had “done the right thing” by putting money aside for the future and their savings were lost “through no fault of their own”.

The minister said he was “delighted” to be able to offer this settlement.

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