Pention link to earnings?

margaretclare

Jennifer_Jane wrote: »

Yes, I would like a reference too, please, as my personal quibble is the lies we were told about deferring the pension and thus losing out on (for me ) two years' capital that I could have had. With inflation if these extra amounts (including the Additional State Pension, guaranteed etc) they will reduce in value to be worthless in time.

We should be better off with the guarantee of the highest of earnings/prices/2.5%, but it would be heartening to hear that the whole Basic State Pension would be increased by whatever percentage every year.

The whole thing was discussed in MoneyBox Live this afternoon. http://www.bbc.co.uk/programmes/b00ss2cx#synopsis

It appears that both parts of the State Pension will be increased, but at different rates. The S2P/SERPS was frozen this April, didn't increase at all. From next April the 2 parts will increase. The basic state pension has what's called the 'triple guarantee' i.e. it will increase in line with whichever is most favourable of 3 different measurements, one of them being 2.5%. SERPS/S2P will increase in line with the Consumer Price Index.

Be_Happy

Jennifer_Jane wrote: »

Yes, I would like a reference too, please, as my personal quibble is the lies we were told about deferring the pension and thus losing out on (for me ) two years' capital that I could have had. With inflation if these extra amounts (including the Additional State Pension, guaranteed etc) they will reduce in value to be worthless in time.

I have the same personal quibble as Jennifer_Jane. When I chose to defer my pension and take an increased pension later, I took the wording in the information booklet "'Your extra State Pension will be paid to you for the rest of your life and will be increased annually in the same way as the rest of your State Pension'." to mean that my deferred pension would be increased in the same way as my basic state pension. Calculations on break-even point were based on this assumption.

annie_tanks

Am I right in thinking that the contracted in SERPS will have less value now than the contracted out SERPS..GMP and all that on another thread...Advise on this would be really helpful.
Thx..

Jennifer_Jane

Be_Happy wrote: »

I have the same personal quibble as Jennifer_Jane. When I chose to defer my pension and take an increased pension later, I took the wording in the information booklet "'Your extra State Pension will be paid to you for the rest of your life and will be increased annually in the same way as the rest of your State Pension'." to mean that my deferred pension would be increased in the same way as my basic state pension. Calculations on break-even point were based on this assumption.

Agree absolutely! Thanks for posting this. Before I received my Pension statement I wasn't aware that they would be delineated separately, I thought they would be merged. I see from the wording above that perhaps I could have been alerted to the 'extra State Pension' but then it should have had the same capital letter as 'State Pension'.

I feel sorry for anyone who has reached any kind of later life and is not receiving the pension they had assumed, and which they had made their life choices about.

Jen

Be_Happy

Jennifer_Jane wrote: »

Agree absolutely! Thanks for posting this. Before I received my Pension statement I wasn't aware that they would be delineated separately, I thought they would be merged. I see from the wording above that perhaps I could have been alerted to the 'extra State Pension' but then it should have had the same capital letter as 'State Pension'.

I feel sorry for anyone who has reached any kind of later life and is not receiving the pension they had assumed, and which they had made their life choices about.

Jen

The information given out did change. Originally it gave the impression that the deferred pension would be included to make a larger basic pension. In later information booklets it made it more clear that the two parts would be treated as separate pensions (but increased in the same way).

I must say, though, that the increase of 20% in my case, has made a very welcome addition to my pension and I'm glad I did take the decision to defer.