The Budget - Military pensions

MTW_2

Its a bit early but if anyone has expertise in this area or knows the answer could you respond please

The chancellor has announced that public sector pensions will be increased in line with the CPI from now on rather than the RPI (which is a bigger number).

How will this effect those of us who have retired with less than 37 years service and are awaiting the uplift that comes at 55, or to put it in a simpler way. I completed my 22 years in 1996 and am due my inflation proofing increase next year. Will this now be based on the CPI or the RPI ??

many thanks

Alias_Omega

MTW,

You might be better posting this on e-goat / pprune etc.

Also it might be worth creating a similar post within the Pensions section for the forum.

Let us know the outcome of what you find.

Regards,

Alias

Muhasib

Its starts at the bottom of page 4 of the Budget Red Book by saying

-'The Budget also announces that the Basic State Pension will be uprated by a triple guarantee of earnings, prices or 2.5 per cent,
whichever is highest, from April 2011.'

So in print the budget measure refers to Basic State Pensions and not Public Sector Pensions as you may have thought on first hearing it.

Of course as you may be aware there will be a separate commission chaired by John Hutton to look into provision of public sector pensions.

Trying_to_be_good

The Budget also refers to all Public Sector pensions - with a plan to change them from RPI to the usually less generous CPI.

The general rule is that they can't take away pension rights already accrued, as they're treated as deferred salary, so I would think you will get the uplift at age 55 as you expect as it's so soon. Those approaching 55 later may find that part of the index linking is at RPI (to the date of the legal change, if it goes ahead) and the remainder of the index linking at CPI.

Or they might change the future stuff totally - we don't know that bit yet, and will need to wait for the John Hutton commission which is looking at all public sector pensions - Armed Forces, Civil Service, Police, Fire Service, Teachers, NHS etc.