Historic injustice reversed as 112,000 former coalminers finally have £1.5 billion from their pension scheme transferred to them, boosting their pensions.

100,000 former mineworkers will receive £1.5 billion of money that was kept from their pensions, overturning an historic injustice and ensuring fair payouts for years to come.

Following the announcement in yesterday’s budget, Energy Secretary Ed Miliband confirmed that the move will mean a 32% boost to the annual pensions of 112,000 former mineworkers – an average increase of £29 per week for each member.

The investment reserve fund was set up using profits from the scheme in 1992, to provide a buffer in case the Mineworkers’ Pension Scheme went into deficit. This money was due to be returned to government in 2029.

Former mineworkers and their families have fought for justice for many years. In a landmark decision, the fund - now worth £1.5 billion – will be handed over to the pension scheme, ensuring former pit workers who powered the country for decades finally get the just rewards from their labour.

When British Coal was privatised in 1994, the government also agreed to take half of any profits generated by the pension scheme, in return for a guarantee that pensions would increase in line with inflation.

The scheme has continued to produce strong returns and the government has never paid any funds into it. Therefore, the government is also delivering on its commitment to review this agreement to ensure former miners and their families get a fairer deal in the years ahead, with next steps set out in the coming months.

Energy Secretary Ed Miliband said: "We owe the mining communities who powered this country a debt of gratitude.

"For decades, it has been a scandal that the government has taken money that could have been passed to the miners and their families.

"Today, that scandal ends, and the money is rightfully transferred to the miners. I pay tribute to the campaigners who have fought for justice- today is their victory."

Minister for Industry Sarah Jones said: "Miners powered our industries and our homes for decades. That’s why we have to right the wrong that has denied them the decent pension they deserved.

"We are handing over the £1.5 billion that for years has sat in the reserve fund unused at times when people needed it most. This will end an historic injustice and will ensure members of the scheme see an average increase of £29 per week added to their pay – an increase of 32%."

Gary Saunders, Chair of the Trustees of the Mineworker’ Pension Scheme, said: "As a Trustee board we are delighted we will be able to put more money in our members’ pockets. We are also grateful to the many members and MPs who have shown support of the Scheme on this matter over the years."

Allen Young, Pensioner Representative Trustee for the North East of England and Overseas members, said: "The government’s decision to make good on this part of its manifesto commitment in respect of the Scheme is a very positive development for our members. The Trustees will use the Investment Reserve to increase our members’ pensions and we will be writing to all members with the good news very shortly."

The trustees are responsible for deciding how the £1.5 billion fund is distributed amongst their 112,000 members and are now working at speed to deliver the bonus into pension pay packets from November this year.

This announcement follows urgent action already taken toward the government’s clean energy superpower mission, helping to boost energy independence and create jobs. In just three months this includes lifting the ban on onshore wind, setting up Great British Energy and announcing a partnership with The Crown Estate to accelerate offshore wind projects, approving four major solar farms, launching the Clean Energy Mission Control centre led by Chris Stark, securing a record pipeline of renewable projects in the latest auction and launching the UK’s first carbon capture sites.