More than 60,000 pensioners over the age of 80 are taking a hit to the value of their pension savings as they have no index-linked element protecting them from inflation.
Campaigners are calling for compensation on the grounds of age discrimination as a clause in a piece of legislation means thousands of pensioners in a certain age bracket are being affected.
Roger Sainsbury, who has set up the Deprived Pensioners Association to call for change, said: “There are 60,000 aged over 80 with no indexation at all. It is unjust, unfair, and causing great hardship in these times of high inflation.”
This is part of a larger group of some 260,000 pensioners who are being hit by a lack of indexation for their pensions.
The campaigners are hoping to secure compensation through a legal action with the Pension Protection Fund (PPF).
When the PPF was set up under the Pensions Act 2004, there was a line in the act which set out that “pensionable service prior to April 1997 shall not give entitlement to indexation”.
This means individuals with pensionable years prior to April 1997 has no indexation for those years and so is taking a hit from inflation, which remained at 8.7 percent in the latest figures.
The oldest Britons are the worst affected by this policy, as they will have the most pre-1997 years accrued.
Included in this group are 60,000 pensioners aged over 80 for whom all their pensionable years were accrued prior to April 1997.
Another 80,000 pensioners accrued some of their pensionable years prior to 1997 and so are suffering from a lack of indexation.
Campaigners also estimate some 120,000 pensioners are being affected by a loss of indexation as their company pensions failed before the PPF was set up, with a total of 260,000 pensioners hit by a lack of indexation.
Lawyer David Greene, from Edwin Coe, is helping the campaign prepare their legal challenge.
He said: “At a time of high inflation the effect of this provision of the law is devastating for thousands of pensioners as their pension reduces effectively at 10 percent or more each year.
“There can be no doubt that the effect of this is to discriminate on the basis of age, older pensioners suffer more than younger.
“We will seek to challenge this discriminatory law in court and campaign for Government action to right this fundamental wrong.”
Express.co.uk has asked the DWP for comment.
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