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Cpi - rpi Final Salary Schemes
Comments
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there seem to me to major unwelcome unintended consequence
- why would any young person start a pension knowing virtually for certain that the T&C of the deal will be changed for the worst by future governments... again and again and again and both in the private and public sector
If what you suggest is true then how can any government encourage people to make provision for their retirement if, having made a provision, they continually have the rug pulled from beneath them because they have a provision? The more you save the more you are hammered is the way it looks to me at the moment.Awaiting a new sig0 -
I wonder when the Govt will change those NS&I index linked certs and also Gilts to CPI after all that is likely to reduce the interest paid on Govt dept, unlike this pension fiasco. Maybe the pension thing is merely an opening gambit on a long-term dastardly plan :eek:'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
hugheskevi wrote: »Dept. for Work and Pensions put out a clarifying statement, available here
They include some examples which may help:
Many thanks for posting that link. This clarifies that for pensions in deferment, like mine, the change is NOT retrospective and all accrued RPI indexing, up to and including 2010, will be unaffected.
I received an illustration for my pension, to be drawn in 2014, a couple of weeks ago. This final salary scheme has most of it RPI indexed linked, with a minimum of 2.5% and a maximum of 5%. 2.5% is assumed for the remaining years, so a change to CPI won't affect that and I may still get more than the illustration figure if CPI remains above 2.5%...0 -
That's a question I posed some time ago on these threads and is one of the questions I have asked of my MP in relation to a double standards issue that, as you say, is evolving.I wonder when the Govt will change those NS&I index linked certs and also Gilts to CPI after all that is likely to reduce the interest paid on Govt dept, unlike this pension fiasco. Maybe the pension thing is merely an opening gambit on a long-term dastardly plan :eek:Awaiting a new sig0 -
spenderdave wrote: »Many thanks for posting that link. This clarifies that for pensions in deferment, like mine, the change is NOT retrospective and all accrued RPI indexing, up to and including 2010, will be unaffected.
I received an illustration for my pension, to be drawn in 2014, a couple of weeks ago. This final salary scheme has most of it RPI indexed linked, with a minimum of 2.5% and a maximum of 5%. 2.5% is assumed for the remaining years, so a change to CPI won't affect that and I may still get more than the illustration figure if CPI remains above 2.5%...
Only part of my pension is (currently) linked to RPI updates; the remainder is at the discretion of the pension’s trustees. This year as RPI was negative there was no rise at all.
What sickens me is that the terms can change ‘under you’ when you have no ability to make other provision. What is to stop a future government changing the minimum increase to half the CPI rate or none? As far as I am concerned this is a retrospective change – pension provision is (or should be) a long term thing that should be immune to such changes!
Depending on who you believe is responsible for the ‘crisis’ (the previous government or the bankers) it is certain that the people who are going to suffer from this will not be MPs or bankers!
My MP is of the oppostion variety - so he will not be interested or able to do anything about this !!0 -
I was thinking of raising this as a Number 10 petition but they don't seem to have resurfaced after the election.
http://petitions.number10.gov.uk/new0 -
there seem to me to major unwelcome unintended consequence
- why would any young person start a pension knowing virtually for certain that the T&C of the deal will be changed for the worst by future governments... again and again and again and both in the private and public sector
TBH most young people don't have the option of a final salary pension so it's a non-issue for them.0 -
TBH most young people don't have the option of a final salary pension so it's a non-issue for them.
Most young people's knowledge of pensions is pretty much non-existant.
What most people are aware of is that pensions have a long and chequered history involving Maxwell, Equitable Life, people losing their pensions when their company went insolvent, a Gordon Brown tax raid and now this.
Most people couldn't explain what Maxwell did, why Equitable Life had to cut pensions, how Brown did (or didn't) take money out of pensions, and very few will understand this.
What they will take away from it all is that you can't trust pensions. And that belief, rightly or wrongly, will influence whether they get a pension in the future.
Remember that come 2012 every employee is due to be automatically enroled into a pension. If you were someone who knew very little about pensions, but had a vague knowledge that a lot of people had lost a lot of money due to some sort of policy decision, wouldn't you be a bit suspicious that someone doesn't have your best interests at heart when putting you into this new pension?0 -
hugheskevi wrote: »Most young people's knowledge of pensions is pretty much non-existant.
So's most middle-aged and old people's.
Government & the financial services industry have a lot to answer for.0 -
I wonder when the Govt will change those NS&I index linked certs and also Gilts to CPI after all that is likely to reduce the interest paid on Govt dept, unlike this pension fiasco. Maybe the pension thing is merely an opening gambit on a long-term dastardly plan :eek:
Didn't take them long
NS&I is withdrawing its fixed interest and index-linked savings certificates and cutting rates on its direct saver and income bonds by 0.25 per cent with immediate effect.
http://www.moneymarketing.co.uk/investments/nsi-slashes-rates-and-pulls-products/1015348.article'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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