Public sector pensions - cpi instead of rpi 24 June 2010 at 6:44PM in Pensions, annuities & retirement planning 113 replies 29.7K views

jem16

Oldernotwiser wrote: »

You may be able to retire from teaching at 60 but you won't get a full pension if you do.

Why not? Age 60 is the normal retirement age.

The only reason you would not get a full pension is if you started teaching later than age 20.

ipri

Hi....Just what are the chances of exixsting pensioners having their monthly pension cut ? ( NHS not state pension )..thanks....ps. And would it be legal ?

Old_Slaphead

ipri wrote: »

Hi....Just what are the chances of exixsting pensioners having their monthly pension cut ? ( NHS not state pension )..thanks....ps. And would it be legal ?

In absolute terms - none. The worst case scenario would be no annual increase (as may happen this year).

Unless of course the country went bankrupt then all bets would be off

joem1619

Old_Slaphead wrote: »

You think foreign aid should be cut to pay you a fraction more?

You'll probably hardly notice the difference - and anyway was RPI indexing ever a 'right'?

We're talking about perhaps 1%pa (say 0.8% after tax) of the pension - not really a fortune given what GB has taken from private pensions, SERPs and from savers. Also some of us 50 somethings will lose another £5k state pension when the pension age is upped to 66.

Existing pensioners with very generous public pension entitlements, shouldn't be exempted from some of the pain - after all they've done well out of the Labour Govt.

Old Slaphead :-

Consultancy firm Towers Watson estimates that, by 2016, a former public sector worker currently receiving a pension of £10,000 a year will be more than £800 a year worse off as a result of the change.

Now that may be 'hardly noticeable' to you but it certainly is to me.......

Andy_L

Old_Slaphead wrote: »

You think foreign aid should be cut to pay you a fraction more?

You'll probably hardly notice the difference - and anyway was RPI indexing ever a 'right'?

For accrued rights: probably - we'll only find out for sure when it goes to court

Old_Slaphead

joem1619 wrote: »

Consultancy firm Towers Watson estimates that, by 2016, a former public sector worker currently receiving a pension of £10,000 a year will be more than £800 a year worse off as a result of the change.

Care to post a link so I can see what they're saying.

I think you mean 'could be' not 'will be'

Yep - assuming a 1% reduced increase that could be around £700 in 6 years time (£560 after tax) - you'll be getting around £12000 rather than £12700 - given that we're always told the average public sector pension is around £4000 the effect willl be much less - ie round £32pa after tax rising to around £200pa in 6 years. Again, small beer after what Labour have done to private pensions - hardly any of us get anywhere near £10,000pa....not to mention what the've done to the savings market!

Anyway do your scheme rules guarantee RPI increases? Bear in mind Labour didn't give ANY increases for S2P and SERPS - didn't see too many public servants protesting about unfairness then !

Anyone with a £10k inflation-proofed pension is reasonablly well off so why shouldn't they be expected to contribute a little? After all, someone's gotta pay for the 'free' bus passes which are slowly being deferred

joem1619

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=507487&in_page_id=6&position=moretopstories


This is the text from the Pension Scheme Rules to which I belong.

'We normally increase our pensions every April in line with prices. The increase is the same as the increase in the Retail Price Index in the year up to the previous September. This is laid down in law, and is the only way we can pay an increase in your pension.'

As far as I'm concerned that was a contractual term between me and my employers. HM Govt were not my employers but at a flick of a pen re-write the rules..

zygurat789

Old_Slaphead wrote: »

You think foreign aid should be cut to pay you a fraction more?

Given what we are told about are parlous financial state , why aren't we in receipt of foreign aid?

real1314

Old_Slaphead wrote: »

Private sector schemes are all but extinct - less than 10% of firms now offer them and virtually none are available for new recruits (I think it's 2 or 3 of the top 100 UK companies)

Some public sector schemes offer better schemes that you quote (ie police, fireservice to name but 2). Also many public schemes offer pensions from age 60 (which gives an extra 5 years of pension) and 3x annual pension as a tax free lump sum (which effectively increases your 50% to around 60% based on longevity of around 20 years).
I think you undersell the benefits of public schemes which is why unions & staff will fight tooth & nail to keep them!

The point I was making was that 2 can play at a game of picking and choosing the best of one world, without presenting an honest picture.

I don't blame anyone for fighting for their pension. In fact I think that Governments are hypocritical to tell people on the one hand that they should save for their own future as they cannot rely on the state pension, yet do nothing to protect the pension investments that they expect people to make. In fact, no only do they do nothing to protect them, they actively devalue them

real1314

Old_Slaphead wrote: »

Again, small beer after what Labour have done to private pensions - hardly any of us get anywhere near £10,000pa....not to mention what the've done to the savings market!

When did you start your pension plan, and how much was your salary during your career?

It's funny that you choose £10k as a figure, which is about double the average public sector pension.

To feel hard done to in comparison to the public sector, and feel that your pension has been devalued, what were you on as a wage? £40k?