RPI to CPI Early Day Motion 1032

Ripoff_2

wotsthat wrote: »

Ripoff thinks this is only about right and wrong.

Forget what the EDM says or other minor technicalities like contract law.

I would just like to correct your assumption wotsthat, I am well aware of contract law and if you read my other posts I have said that there could well be legal challenges.

In fact there could well be challenges using the Human Rights Act as pensions are possesions....etc etc but to keep it simple for the time being then this EDM is the easiest way to go. If the MP's STOP and think about this they may and it's a big may, put things on hold until CPI is at the very least made fit for purpose.

At the moment CPI is fundementally flawed and the Government knows that, using it as it is, is deception. The RPI contract issue would then be the next stage but as it stands at the moment lets try and get a stay of execution for everyone.

Ripoff_2

I suggest the doubters amongst you should read the following: "How the RPI rip off will hit more pensioners than Maxwell or Brown" by Ian Cowie the personal finance editor of the Daily Telegraph.

blogs.telegraph.co.uk/finance/ianmcowie/100008997/how-the-rpi-rip-off-will-hit-more-pensioners-than-maxwell-or-brown/ (cut and paste URL into your browser)

Perhaps all those MP's that have not yet signed the EDM should be sent this article so they can read it over Christmas. The article says it all really but in clear concise words.

wotsthat

In fact there could well be challenges using the Human Rights Act as pensions are possesions....etc etc but to keep it simple for the time being then this EDM is the easiest way to go. If the MP's STOP and think about this they may and it's a big may, put things on hold until CPI is at the very least made fit for purpose.

What people in these schemes are now going to be financially supported through to 85 or 90 years of age rather than the 75 they expected when they signed up? Human Rights Act - how ridiculous.

I'm not going to comment again except to say I do have an interest and RPI to CPI will have a detrimental affect on future income. I don't see why my kids and grandkids should subsidise generous pension benefits that they'll never have a chance to get for themselves. Some poster suggested that half of the young people didn't work anyway - I know that - some of them haven't been born yet!

SnowMan

Ripoff wrote: »

I suggest the doubters among you should read the following

blogs.telegraph.co.uk/finance/ianmcowie/100008997/how-the-rpi-rip-off-will-hit-more-pensioners-than-maxwell-or-brown/

Quite an interesting article. Here is the direct linky.

http://blogs.telegraph.co.uk/finance/ianmcowie/100008997/how-the-rpi-rip-off-will-hit-more-pensioners-than-maxwell-or-brown/

It doesn't mention the change from arithmetic to geometric average which is one of the real hidden but significant nasties with CPI.

But it is hard to see what moral or legal right it has to strip members of private sector pensions of this valuable protection

Pretty much sums it up in relation to private sector schemes.

Ripoff_2

SnowMan wrote: »

Quite an interesting article. Here is the direct linky.

http://blogs.telegraph.co.uk/finance/ianmcowie/100008997/how-the-rpi-rip-off-will-hit-more-pensioners-than-maxwell-or-brown/

It doesn't mention the change from arithmetic to geometric average which is one of the real hidden but significant nasties with CPI.

Pretty much sums it up in relation to private sector schemes.

Thanks Snowman and yes the Formula effect is between 0.4 and 0.86, recently 0.9 hence further proving why CPI is fundementally flawed and should NOT be used as it is.

You should not use a measure that produces such a variance between two sets of measures when the major difference is just down to the formula, this is statistical madness, the RSS and ONS have agreed on this, but still Steve Webb & Co think they no best, what qualifications do they have, if any to overrule the professionals.

What confidence will people ever have in pensions if this policy is not stopped. The article says it all really.

mjm3346

Old_Slaphead wrote: »

Public schemes and ex nationalised utilities with taxpayer guarantees seemed, until recently, totally oblivious to this (indeed the union & Labour party still do)- something that the private sector cottoned on to a decade or more ago.

The main civil service scheme was under review a decade ago and closed to new entrants over 8 years ago with yet another scheme introduced in 2007.
The various changes have included going from no contribution to 3.5% and much more to come with any future cost increases shared 50/50 from April 2012, lifetime averaging instead of final salary, retirement age raised 5 years to 65 and a cap on employer contributions.


The simple answer to RPI/CPI is they will no doubt later in this Govts term either stop producing the RPI figure or change the basis for the calculation.

Stargazer57

mjm3346 wrote: »

The various changes have included going from no contribution to 3.5% and much more to come with any future cost increases shared 50/50 from April 2012, lifetime averaging instead of final salary, retirement age raised 5 years to 65 and a cap on employer contributions.

You've forgotten to mention that the accrual rate increased from 1.25% to a staggering 2.3% at the same time. Only in Britain's public sector were pensions still being improved this decade.

mjm3346

Stargazer57 wrote: »

You've forgotten to mention that the accrual rate increased from 1.25% to a staggering 2.3% at the same time. Only in Britain's public sector were pensions still being improved this decade.

1/80 for classic and 1/60 for premium could look at first glance look like 1.25% compared to 1.66% and that suckered a lot in (including the unions) when the scheme changed.
For the average person there was little or no gain in in exchange for an extra 3.5% contribution.


Someone on £10,000 with 40 years service would get
classic £5,000 pension and £15,000 lump sum
premium £6,666 pension and no lump sum

Ripoff_2

The latest November Inflation figures prove the government is making poor people worse off by using CPI for measuring pension payment increases.

Latest figures from the Office for National Statistics show the consumer prices index posted an annual rise of 3.3% in November, up from 3.2% last month. The retail prices index rose from 4.5% to 4.7%.

The figures make worrying reading for low-income pensioners.

The ONS figures showed RPI inflation increases remained unaffected by mortgage interest payments, challenging claims by pensions minister Steve Webb that RPI inflation was unsuitable for pensioners because it included mortgages.

The RPIX measure of inflation - which is the RPI minus mortgage interest payments - showed an annual rise to 4.7%, identical to the RPI level.

Steve Webb justified the CPI switch by saying it was a better reflection of pensioner living costs as it was not influenced by mortgage interest payments.

He said: "The housing cost component of price inflation indices was one feature considered when making the decision to use the consumer prices index for the indexation of pensions."

Only 7% of pensioners have a mortgage. The CPI excludes mortgage interest, which is not a relevant housing cost for the majority of pensioners."

This all blows Steve Webb's arguments clear out of the water.

Stargazer57

mjm3346 wrote: »

For the average person there was little or no gain in in exchange for an extra 3.5% contribution.

The fact that you can claim this shows how little you understand about what has happened to the cost of public sector pensions. I think they have more than doubled in the last 15 years (from less than 20% of pay to nearly 40% of pay) and you are complaining about having to contribute 3.5% of pay.