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BT Pension Index Linking
Comments
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As a result of being fired up by this forum and the EDM forum, I have actually taken some action Emailing my MP(Tory). I've tried to make the point for some sort of miss selling. Back in 1997 when I took the package there wasn't a CPI- I think, so all my once in a lifetime decisions were based upon RPI as that's what every piece of written information referred to.
Are you saying that if the benefit had been linked to CPI in 1997 you would have made a different decision?0 -
Stargazer57. Would I have made a different decision, probably not. I remember doing a number of calculations based upon assumed inflation - rubbish looking back - to try and see the kind of pension I would get/need in future. When my standard of living would be not worth living for. As you know RPI is Micky Mouse too then as now, not reflecting the cost of living in my world. But I guess that date in the future is now significantly brought forward using CPI. I'll just have to expire earlier. Regards0
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As a result of being fired up by this forum and the EDM forum, I have actually taken some action Emailing my MP(Tory). I've tried to make the point for some sort of miss selling. Back in 1997 when I took the package there wasn't a CPI- I think, so all my once in a lifetime decisions were based upon RPI as that's what every piece of written information referred to.
I notice that there isn't too much outcry regarding this maybe because we pensioners are lumped in with the Feathered bedded public servants- Somehow that needs to be cleaned up. Another tiny point. Employers read these forums too, well the technology does, collecting all the relevant details to tackle issue by issue. Just a thought. Regards
Just to clarify CPI was introduced in 1996 but not exactly in the same format as today, see link below.
http://www.statistics.gov.uk/cci/nugget.asp?ID=181
I don't know what we can do about employers reading these forums this is an open debate and as such I can't see anyway we can alter that. Maybe seeing how angry people are about this may have a positive effect on them to do the right thing!
In the end it will be the legal arguments that win through or just people out on the streets fighting for their rights, bad press etc, I don't know. It's Christmas and Goodwill to ALL men so employers may well get the Christmas spirit and honour their commitments to us ex employees without having to resort to the courts? What ever happens this is not going to go away.0 -
As a result of being fired up by this forum and the EDM forum, I have actually taken some action Emailing my MP(Tory). I've tried to make the point for some sort of miss selling. Back in 1997 when I took the package there wasn't a CPI- I think, so all my once in a lifetime decisions were based upon RPI as that's what every piece of written information referred to.
I notice that there isn't too much outcry regarding this maybe because we pensioners are lumped in with the Feathered bedded public servants- Somehow that needs to be cleaned up. Another tiny point. Employers read these forums too, well the technology does, collecting all the relevant details to tackle issue by issue. Just a thought. Regards
I have every sympathy for your first paragraph but am dismayed at the first sentence of your second paragraph. This is just the attitude we do not want, people in the public sector are not featherbedded anymore than BT workers were or are. If we are going to win this fight it will be by uniting with all the thousands affected not dividing and sniping at eachother! It may be that concessions or change will arise following mass demonstrations once the strength of injustice is harnessed together.
I have worked in the public sector four times including the GPO, the privates sector 3 times including BT, for an agency and been self employed - none of it was featherbedded.0 -
If any people affected by the RPI/CPI change are wavering in their determination to write to their MP or join NFOP etc. take a look at the Daily Telegraph website finance section to see how big an impact it may have. "Interest-rates-may-hit-8pc-in-two-years" This is why it is important to remain on RPI and also shows precisely why the government made it their first priority to make the change - because they knew that when their cuts hit home and with "quantative easing" the situation will only worsen.0
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For anyone who is still in any doubt as to the true effect of the RPI to CPI change and believes the Government assertion that 1% difference is not that much of an issue. Then I have shown below the actual values of the loss incurred with the RPI to CPI change for £2000, £3640, £5,000, £10,000, £15,000 and £20,000 gross pensions over 30 years.
This is based on an average RPI at 3.1% and a RPI to CPI formula effect of 0.75%, with the first year set at 1.5% as this is a known value because of the proposed change by the government in April 2011. I believe these values are a reasonable assumption but they of course may be less, the gap may reduce, but the effect will be the same, a loss that increases with time.
You can clearly see from these figures the exponential effect of this change. The pensioner’s loss is greater as time increases. Should inflation be greater than 3.1% on average over the 30-year period and the formula gap stay around the 1% level, then the losses will be even greater.
This cumulative and compounding effect will be devastating to the pension received later in life.
Key for headings.
Year = Year from 2011 onwards
Pr Mth = Actual Loss per mth in £'s
!!! Loss = Cumulative £'s Loss over the years
Yrs = Number of years to give the loss
The figures shown have been modelled using Excel and are therefore true values based on the criteria shown above, they are actual losses that will be incurred based on the assumptions given. They exclude allowances for Tax and are Gross values.
This is for a £2,000 pension
Year---- Pr Mth-- !!! loss
Yrs
2011---- £3
£30
1
2015---- £8
£323
5
2020---- £18
£1,150
10
2025---- £29
£2,621
15
2030---- £44
£4,903
20
2035---- £63
£8,201
25
2040---- £86
£12,761
30
As above for a £3,640 pension
Which the Governments says is average occupational pension of £70 per week
Year---- Pr Mth-- !!! loss
Yrs
2011---- £5
£55
1
2015---- £15
£588
5
2020---- £32
£2,093
10
2025---- £54
£4,770
15
2030---- £80
£8,924
20
2035---- £114---- £14,926
25
2040---- £156---- £23,226
30
As above for a £5,000 pension
Year---- Pr Mth-- !!! loss
Yrs
2011---- £6
£75
1
2015---- £21
£807
5
2020---- £44
£2,875
10
2025---- £74
£6,552
15
2030---- £111---- £12,258
20
2035---- £157---- £20,503
25
2040---- £214---- £31,903
30
As above for a £10,000 pension
Year---- Pr Mth-- !!! loss
Yrs
2011---- £13
£150
1
2015---- £42
£1,614
5
2020---- £88
£5,751
10
2025---- £147---- £13,104
15
2030---- £221---- £24,516
20
2035---- £313---- £41,006
25
2040---- £428---- £63,806
30
As above for a £15,000 pension
Year---- Pr Mth-- !!! loss
Yrs
2011---- £19
£225
1
2015---- £63
£2,421
5
2020---- £133---- £8,626
10
2025---- £221---- £19,656
15
2030---- £332---- £36,773
20
2035---- £470---- £61,509-
25
2040---- £642---- £95,710
30
As above for a £20,000 pension
Year---- Pr Mth-- !!! loss
Yrs
2011---- £25
£300
1
2015---- £84
£3,228
5
2020---- £177---- £11,502
10
2025---- £294---- £26,208
15
2030---- £442---- £49,031
20
2035---- £627---- £82,012
25
2040---- £855---- £127,613
300 -
Can you please add a column stating what the monthly pension would be if RPI were used? That would help people see it in perspective of what they would get if RPI were kept against how much less if it isn't - hence would be far more informative.0
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Chris it was easier for me to add the yearly pensions at RPI & CPI this should help people really understand!Can you please add a column stating what the monthly pension would be if RPI were used? That would help people see it in perspective of what they would get if RPI were kept against how much less if it isn't - hence would be far more informative.
For anyone who is still in any doubt as to the true effect of the RPI to CPI change and believes the Government assertion that 1% difference is not that much of an issue. Then I have shown below the actual values of the loss incurred with the RPI to CPI change for £2000, £3640, £5,000, £10,000, £15,000 and £20,000 gross pensions over 30 years.
This is based on an average RPI at 3.1% and a RPI to CPI formula effect of 0.75%, with the first year set at 1.5% as this is a known value because of the proposed change by the government in April 2011. I believe these values are a reasonable assumption but they of course may be less, the gap may reduce, but the effect will be the same, a loss that increases with time.
You can clearly see from these figures the exponential effect of this change. The pensioner’s loss is greater as time increases. Should inflation be greater than 3.1% on average over the 30-year period and the formula gap stay around the 1% level, then the losses will be even greater.
This cumulative and compounding effect will be devastating to the pension received later in life.
Key for headings.
Year = Year from 2011 onwards
Pr Mth = Actual Loss per mth in £'s
!!! Loss = Cumulative £'s Loss over the years
Yrs = Number of years to give the loss
RPI Pen = Pension after increase per year at RPI
CPI Pen = Pension after increase per year at CPI
The figures shown have been modelled using Excel and are therefore true values based on the criteria shown above, they are actual losses that will be incurred based on the assumptions given. They exclude allowances for Tax and are Gross values.
This is for a £2,000 pension
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £3
£30
1
£2,092
£2,062
2015---- £8
£323
5
£2,364
£2,263
2020---- £18
£1,150
10
£2,754
£2,541
2025---- £29
£2,621
15
£3,208
£2,854
2030---- £44
£4,903
20
£3,737
£3,206
2035---- £63
£8,201
25
£4,353
£3,601
2040---- £86
£12,761
30
£5,071
£4,044
As above for a £3,640 pension
Which the Governments says is average occupational pension of £70 per week
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £5
£55
1
£3,807
£3,753
2015---- £15
£588
5
£4,302
£4,118
2020---- £32
£2,093
10
£5,011
£4,625
2025---- £54
£4,770
15
£5,838
£5,195
2030---- £80
£8,924
20
£6,801
£5,835
2035---- £114---- £14,926
25
£7,922
£6,553
2040---- £156---- £23,226
30
£9,229
£7,361
As above for a £5,000 pension
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £6
£75
1
£5,230
£5,155
2015---- £21
£807
5
£5,909
£5,657
2020---- £44
£2,875
10
£6,884
£6,354
2025---- £74
£6,552
15
£8,019
£7,136
2030---- £111---- £12,258
20
£9,341
£8,015
2035---- £157---- £20,503
25
£10,882
£9,002
2040---- £214---- £31,903
30
£12,677
£10,111
As above for a £10,000 pension
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £13
£150
1
£10,460
£10,310
2015---- £42
£1,614
5
£11,819
£11,314
2020---- £88
£5,751
10
£13,768
£12,707
2025---- £147---- £13,104
15
£16,038
£14,272
2030---- £221---- £24,516
20
£18,683
£16,030
2035---- £313---- £41,006
25
£21,764
£18,004
2040---- £428---- £63,806
30
£25,353
£20,221
As above for a £15,000 pension
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £19
£225
1
£15,690
£15,465
2015---- £63
£2,421
5
£17,728
£16,971
2020---- £133---- £8,626
10
£20,651
£19,061
2025---- £221---- £19,656
15
£24,057
£21,408
2030---- £332---- £36,773
20
£28,024
£24,045
2035---- £470---- £61,509-
25
£32,646
£27,006
2040---- £642---- £95,710
30
£38,030
£30,332
As above for a £20,000 pension
Year---- Pr Mth-- !!! loss
Yrs
RPI Pen
CPI pen
2011---- £25
£300
1
£20,920
£20,620
2015---- £84
£3,228
5
£23,637
£22,628
2020---- £177---- £11,502
10
£27,535
£25,414
2025---- £294---- £26,208
15
£32,076
£28,544
2030---- £442---- £49,031
20
£37,366
£32,060
2035---- £627---- £82,012
25
£43,528
£36,008
2040---- £855---- £127,613
30
£50,706
£40,4420 -
I too am furious at BT, having retired many years ago, my long term outgoings were all protected by the assumption that RPI will be used.
Lets face it if BT had an ounce of respect, they'd have opted for the wages accellerator option as per the Govt announcment
This company is obviously now run by low mentality opportunists who care nothing for the Billions that have been paid into this scheme by members like myself, in the belief that they were protected.
The only priority BT now have are the shareholders.
Staff and pensioners mean nothing.
Also as a long term customer I know full well the contempt they have for us in that respect.
(Upon reporting a simple fault at my local exchange 8 weeks ago I was told they could only guarantee a repair within 5 days. What a disgrace, that's even worse than the 1960's - a lot worse).
Well BT will find that from April of this year my annual contribution to their telephone and broadband (at only 350k) scam will in all likelyhood end.
I can get it far cheaper elsewhere, and if necessary I'll do without - saving far more than they gain from reducing my pension.
There are at least another 180,000 retired just like me and 340,00 members potentially.
So, well done BT yet another abject mis-management feather in your cap.
Incidentally, with the previous announcememt that the taxpayer was liable if the BT scheme ever went bust, doesn't a forced reduction in pensions count as going bust?.
Annuity rates would have to apply giving guess what? RPI linking, now of course lost to cpi or worse.
And aren't TRUSTEES supposed to look after the interests of their members, this lot seem like a right bunch of wimps. and far too close to the people that run the scheme too, in the same building, no doubt having lunch together.
Of course only 2 of them will be affected by this reduction.0
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