The budget - military pensions

MTW_2

Also posted on the military forum

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

novice-saver

I thought the pension part of the budget was:

Link between basic state pension and earnings to be restored.

I.E. ordinary old age pension.

molerat

If it is changed it will only apply to future annual notional increases, they won't backdate it.

MTW_2

novice-saver wrote: »

I thought the pension part of the budget was:

Link between basic state pension and earnings to be restored.

I.E. ordinary old age pension.

I am sure he said that increases to public sector pensions will now be in line with the CPI. This was a while after he announced the public sector pensions funding review.

I suppose the detail will be forthcoming in the next day or two.

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.

Andy_L

muhasib wrote: »

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.

On page 7
"The Government will adopt the CPI for the
indexation of benefits, tax credits and public service pensions from
April 2011"

I'd agree with molerat, i'd expect you to get RPI from 1996 to 2011 & then CPI from then on. Although its possible they didn't consider the effect on defered pensions and will be making it up as they go along