The UK lifeboat for the retirement schemes of failed companies will now charge £120m less for its services, illustrating the wider-impact of the government's move in the summer to link pension payouts to the CPI index.

The Pension Protection Fund, which is a bailout fund for pension schemes attached to companies that go bust, said today it would charge the UK's businesses £600m for its services in the financial year 2011/12. That is a £120m reduction on the £720m cost of its 'levy' this year.