"There can be few greater cruelties than to find the pension you have earned has suddenly disappeared through no fault of your own.  That is why the Financial Assistance Scheme, which we are completing with these regulations, is so important to around 150,000 people.”

The Government established the Pension Protection Fund (PPF) in 2005, which compensates employees if their defined benefit pension schemes are wound up without enough funds to pay their pensions. However, the PPF was not restrospective, so that anyone in a scheme that failed before April 2005 was dependent on payouts from the less generous FAS.

The FAS is now to be brought in line with the PPF, which will take over its adminstration from the Department for Work & Pensions. The £3.5bn cost is being part funded by the Government absorbing assets remaining in the affected pension schemes.

However, Dr Ros Altmann, veteran pensions campaigner and a former pensions adviser to the Government, insists that the minister's comments are misleading. "Angela Eagle says FAS will guarantee at least 90% - this is simply not true," says Dr Altmann. "The Financial Assistance Scheme, which is of course very welcome, and has made a significant difference to many victims' lives, pays only UP TO 90%, not AT LEAST 90%.  For almost all of the 150,000 victims the payments will actually be less than 90%.

"I am not sure whether Angela Eagle knows this is not true and is misleading the public and Parliament on this matter, or whether she does not actually understand that it is not even 90%, never mind the 'at least 90%', which she claims", add Dr Altmann.

TUC General Secretary Brendan Barber was much more complimentary and said: “The creation of the FAS is a real victory for unions’ long campaign to compensate thousands of people whose pension schemes collapsed before the Pensions Protection Fund. Ministers should be applauded for their commitment to bringing the FAS into fruition and finding the necessary resources to do so.”