The Pension Protection Fund (PPF) has today announced that changes to terminal illness provisions for PPF and Financial Assistance Scheme (FAS) members have come into effect, following the Pension Schemes Act 2026. The change extends the life expectancy criterion from 6 months to 12 months.
Previously, legislation stipulated that PPF and FAS members were eligible to receive a terminal ill health payment if they had been diagnosed with a terminal illness and were expected to have six months or less to live. From 29 June 2026, that has changed to 12 months, bringing the definition broadly into line with Department for Work and Pensions (DWP) social security payment rules. This allows payments to be made earlier for terminally ill members, helping eligible members to access their benefits sooner when it can make a real difference.
Members diagnosed with a terminal illness, where a doctor confirms that they have 12 months or less to live, can receive a terminal ill health payment before reaching their normal pension age. For PPF members, this is usually a one-off tax-free lump sum equal to two years’ compensation. For FAS members, it means they can begin receiving their monthly assistance payments earlier, with payments continuing for the rest of their life.
By making payments available earlier, the change will help terminally ill members and their families access financial support sooner, helping with expenses associated with end-of-life care and giving people more financial certainty at a difficult time.
Sara Protheroe, Chief Customer Officer at the PPF said: “We welcome this change, which will help terminally ill PPF and FAS members access financial support sooner, at a time when it can make a real difference. For members and their families facing an incredibly difficult period, having greater certainty and flexibility can help ease some of the financial pressure.”
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