RPI to CPI Early Day Motion 1032

annie_tanks

Hi Mey,
You either have a public sector final salary pension, where future increases will be based on CPI..marginally lower than RPI
or you have a private pension and retired/not there maybe an mixture of final salary and money purchase pension..a hybrid pension..its the final salary bit that may change..what do you have..??
or you have no supportive pension then its just the state pension, that we are all entitled to.
I suggest you read this..
http://www.dwp.gov.uk/newsroom/press-releases/2010/july-2010/dwp088-10-120710.shtml

Haybob

Many thousands have private sector pensions that were originally in the public sector. For example all the many once nationalized companies that were privatised by Mrs Thatcher. The likelyhood is they will be changed from RPI to CPI unless they have RPI written into their trust deeds. A now private company such as BT (once the GPO then PO) has several pension schemes running at the same time, the one that you pay into depends on when you joined. The first 2 (section A&B) have now linked to CPI but section C will remain as RPI just because that is what was specified in the small print. Many other private companies that were once nationalised have similar anomolies.

It's already too complicated, therefore I hope all would unite behind RPI (or a similar agreed index) for all.

teacher_retired

Haybob wrote: »

Many thousands have private sector pensions that were originally in the public sector. For example all the many once nationalized companies that were privatised by Mrs Thatcher. The likelyhood is they will be changed from RPI to CPI unless they have RPI written into their trust deeds. A now private company such as BT (once the GPO then PO) has several pension schemes running at the same time, the one that you pay into depends on when you joined. The first 2 (section A&B) have now linked to CPI but section C will remain as RPI just because that is what was specified in the small print. Many other private companies that were once nationalised have similar anomolies.

It's already too complicated, therefore I hope all would unite behind RPI (or a similar agreed index) for all.

Makes sense although I suspect a modied cpi will emerge.

chris_m

teacher_retired wrote: »

Makes sense although I suspect a modied cpi will emerge.

To be honest, that would probably be the simplest solution - if a modified CPI is devised which includes things like housing costs (rent, mortgage, council tax), then I suspect that would satisfy everyone, or nearly everyone.

Haybob

A modified CPI may indeed emerge; but what has dismayed me is the fact that so many different pressure groups have members affected by this change and they have just not united to get a meaningful protest in action. Correct me if I am wrong but 17 February 2011 is the date they have made this change a permanent feature for so many duped pension members. Why all the Unions representing those affected have not united to protest, I can not understand. At this late hour it seems that the only group organised to DO anything is the CPSA now belatedly followed by the NPS, OPA and NFOP. I hope that I am proved wrong but it seems thousands have been let down when a couple of Green Volvo Drivers (and I congratulte them) can organise a petition that causes a Government to rethink (or scrap) a policy, then why oh why have not the representatives of all the Armed Forces, Public Servants and affected private pension members united in action to defend their accrued rights?

JamesU

annie_tanks wrote: »

My strong advise is for people in private pensions to take control of their occupational part of pensions by switching their funds and stuff in as much AVC's as is possible.If you had switched to equities 2 years ago you would have made 30% extra by now..now that is worth taking control for your future..is it not..

And if you had switched to equities in early 2007, and retired two years later, you would have lost 30% of the value of your pension pot at retirement too.

annie_tanks wrote: »

You either have a public sector final salary pension, where future increases will be based on CPI..marginally lower than RPI or you have a private pension and retired/not there maybe an mixture of final salary and money purchase pension..a hybrid pension..its the final salary bit that may change..I suggest you read this..

A marginal effect on switching from RPI to CPI???
Previous post #128 as below. Here is the real situation with some basic maths!


For somebody on a £4000/yr deferred pension and retiring in 20yrs time:

Assuming CPI = 2.0%, £4K compounded over 20yrs = £5944
Assuming RPI = 2.8%, £4K compounded over 20yrs = £6949

Differential is (6949/5944) = 17% reduction in income

Over 30 yrs (i.e 20 years before retirement then 10 years into retirement):

Assuming CPI = 2.0%, £4K compounded over 30yrs = £7245
Assuming RPI = 2.8%, £4K compounded over 30yrs = £9159

Differential is (9159/7245) = 26% reduction in income

I do not think it is justifiable for public or private sector workers on such modest final salary schemes to face a 17% reduction in income at retirement, rising to 26% reduction in income 10yrs into retirement. And do bear in mind these % reductions occur for all penison sizes.

http://forums.moneysavingexpert.com/showpost.php?p=39231214&postcount=128


JamesU

viridens

As a fairly recent PS pensioner This also worries me:

What do you think?

wwwdotbbc.co.uk/news/business-12509488

Please change the dot to a ". "in the link above to reach the BBC page.

Edit. See post below for Proper link. Many thanks!

Sorry to have to submit the link in a way which makes it hard work to access, but I had to get around this message from this website:

"1. Sorry as a new user you are not allowed to post with links. This is done to stop spammers clogging up the site. Please edit your message below to continue"

This is the only way I could think to post as intended...

JamesU

viridens wrote: »

As a fairly recent PS pensioner This also worries me:
What do you think?

http://www.bbc.co.uk/news/business-12509488

viridens

Many thanks to JamesU for posting a proper link for my last post. I'm still sitting here feeling aggreived after typing it.

During my working life in the NHS & then in teaching I did all that was asked of me to guarantee my pension. I gave 6% of all I earned, with a further 12% or more contributed by my employers. In the terms & conditions for both of these schemes index linking of my pension to RPI is there in black and white. It is not my fault that successive Govenment 'experts' got their sums & projections wrong, or chose to use this money hand-to-mouth instead of establishing proper invested & funded schemes.

Am I wrong for expecting HM goverment to fulfill their side of the pension agreement, the conditions of which were clearly written in the schemes I joined, and to which I contributed in trust and good faith? If I told my local council, Gas and electricity companies that I had a financial shortfall, needed to make cuts and would not fully pay any inflation increase from now on, what would they say to me?

Forgive me for not intending to submit willingly to progressive poverty in old age following a retrospective change of the rules, or to being short-changed by stealth or incompetence, which was the subject of my last post above. This is NOT what I signed up for.

JamesU

viridens wrote: »

I'm still sitting here feeling aggreived typing after my last post.

Viridens, if people believed that CPI would be a satisfactory measure of inflation I doubt there would be so much concern. But depite the Government's action and view that CPI is a satisfactory measure of inflation, the public do not believe them. Even Newsnight mentioned this exact point unequivocally early last week.

The EDM1032 highlighted on this thread and the actions being taken by numerous groups, is a direct response to the inadequacy of CPI and it's implimentation without sufficient consultation.

JamesU

Early Day Motion

EDM 1032
INDEXATION OF PENSIONS AND BENEFITS
17.11.2010

Robertson, John That this House notes the Government's proposal to use the Consumer Price Index (CPI) rather than the Retail Price Index (RPI) for the price indexation of benefits, tax credits and public service pensions; further notes that the CPI is consistently lower than the RPI; expresses concern over the impact that this will have on the incomes of pensioners and other vulnerable groups; recognises the concerns held by the Royal Statistical Society and the UK Statistics Authority that CPI excludes many housing costs which are borne by the majority of pensioner households; and calls on the Government to take these concerns into account and postpone the change from RPI to CPI until the appropriateness of CPI as a measure of price increases borne by pensioner households can be fully evaluated.

Ripoff wrote: »

As of today 117 MP's have signed the EDM, which by EDM standards is very good. I must say that using the EDM has proven to be a good tool to get the message out there and this forum has certainly done that with over 21k views.

The battle however is far from over and to that end don't forget the Rally and Lobby in London on the 1st March and the TUC rally on the 26th March......The battle has really now only just begun. Legal challenges will ensue, I am sure of that. Especially when many private pensioners or public pensioners see their income falling drastically as inflation rises, then I am sure they will be motivated to take further action.

Don't forget to spread the word and remember many of you will have a vote soon at the Local Elections on May 5th, where I am sure you will show your feelings.