RPI to CPI Early Day Motion 1032

Thicko2

JameU - thank you for post 837. It is very clear from evidence from all sources that it is a lie of unaffordability based upon current %expenditure. The honest approach from the government would be this is a cut for financial reasons (as our hutton recomendations). I dislike the diversive approach and believe it is a wider agenda based on encouraging private sector into public service and gaining the support of the unfortunate people in the private sector who have been horibly hammered by their employers and their pension arrangements.

JamesU

Thicko2 wrote: »

JameU - thank you for post 837. It is very clear from evidence from all sources that it is a lie of unaffordability based upon current %expenditure.

It does not really follow from the evidence at hand that "it is a lie of unaffordability". That very much depends on what % of GDP is considered affordable to fund public pensions, hence why I raised the question on the post.

Thicko2 wrote: »

The honest approach from the government would be (to say) this is a cut for financial reasons (as our hutton recomendations).

Interestingly the Labour party raised this precise point during the Parliamentary discussion prior to the vote on uprating using CPI instead of RPI. They would have agreed to the temporary use of CPI for cost reduction, but not as a permanent measure.

JamesU

Haybob

I completely concur with Viridens last paragraph. May I also suggest that the vast majority of those affected feel that this sneaky change is imposed without any moral justification but has the effect of progessively degrading the pensions of thousands of (duped) pensioners. Perhaps it is time to start a new thread after the EDM (if it fails to change the policy of this government) to debate what pressures we can unite behind to keep this sneaky steal from being forgotten. Afer all it is the passing of time that is going to show what a detrimental impact this change will have in keeping up with inflation.

In the meantime keep signing the petition, writing letters and lobbying union representatives.

Ripoff_2

Haybob wrote: »

I completely concur with Viridens last paragraph. May I also suggest that the vast majority of those affected feel that this sneaky change is imposed without any moral justification but has the effect of progessively degrading the pensions of thousands of (duped) pensioners. Perhaps it is time to start a new thread after the EDM (if it fails to change the policy of this government) to debate what pressures we can unite behind to keep this sneaky steal from being forgotten. Afer all it is the passing of time that is going to show what a detrimental impact this change will have in keeping up with inflation.

In the meantime keep signing the petition, writing letters and lobbying union representatives.

To this end, 123 MP's have now signed the EDM and one MP has tabled an amendment saying CPI has been lower 16 years out of the past 22 Years. This EDM is very much alive and we need to get more letters to the MP's and MORE people aware of what is happening.

I know it's hard but we really MUST keep hammering away at this.

Ripoff_2

Change has got passed the Lords but this is only for this year, they have to come back with a new uprating each year so this fight is no where near over.

http://www.professionalpensions.com/professional-pensions/news/2034072/lords-approve-rpi-cpi-indexation-switch?WT.rss_f=&WT.rss_a=Lords+approve+RPI%2FCPI+indexation+switch

It was confirmed the order would not override scheme rules where RPI was ‘hard-wired' and Labour peer Lord McKenzie stressed the need to maintain the index for accrued benefits.
"It is also very important that pensioners with accrued benefits under RPI should have those benefits maintained and that, if the choice is made to change, CPI should occur only after the CPI regulation hits the deck," he said.



The Bill's sponsor, Conservative Lord Freud did not address Liberal Democrat Lord German's request for more information on whether the switch would reduce the pressure on occupational schemes.
An impact assessment by the Department for Work and Pensions on the effects of a switch to CPI for occupational schemes produced in February however, stated that some schemes could become more sustainable as a result and liabilities could be reduced by £60.9bn.

Ripoff_2

ONS updates the latest basket of goods for 2011.....still no housing costs or Vehicle Excise duty in the CPI.......Is this the latest fiddle by a Government with no morals or am I just being cynical. Maybe the ONS have changed things for the better but there again they have included dating agencies and removed fleeces. Now then, my guess is that pensioners need fleeces but dating agencies? maybe but not when they need to keep warm but Steve Webb does insist that the CPI "is a better measure of pensioner inflation". So it must be true then??????? Not when I asked for proof it wasn't, he didn't back it up with actual proof, just keeps saying it and seems to think that if he does that, then it must be true!! Where's the proof Mr Webb is what I keep saying, the RSS doesn't agree with him and so far I have not found one professional body that does.

http://www.guardian.co.uk/business/2011/mar/15/uk-shopping-basket-updated?CMP=twt_fd

Bill1980_2

Hi All

This is my first post on MSE but I have been reading this thread with great interest over the last few months.

I just wanted to highlight something that I feel does not get enough mention.

Deferred benefits will also be upgraded with CPI!

I have bought additional pension (ARC) as well as putting into a LGPS for years and had thought that at a young age (31) that was a very responsible thing to do.

If I am unfortunate enough to be made redundant, choose to leave Local government or when the accrued benefits get "protected" when we move to the new Hutton recommendations my pension will be devalued for the next 30-40 years and will be worth nothing by the time I start claiming my pension let alone by the end of my life.

I checked and rechecked all the documentation received and it clearly states RPI increases.

Steve Webb's (incorrect) argument is that CPI is a better measure of inflation for pensions, as it does not include housing costs so why is it being used for deferred pensions?

teacher_retired

Someone recently asked how we can alert union members currently in work to the importance of EDM 1032 and impact of cpi once we are retired.
I retained my union membership after I retired. This has given me a useful set of email contacts with union officials. Useful discussions have taken place and views from retired members are listened to.
I wonder how many retired folk could do the same?
If you can rejoin your union as a retired member and if you wish get your views known by this means.

Haybob

At least we seem to have one Tory seeing the steal for what it is.

http://www.mindfulmoney.co.uk/?lid=3543

Ripoff_2

Bill1980 wrote: »

Hi All

Steve Webb's (incorrect) argument is that CPI is a better measure of inflation for pensions, as it does not include housing costs so why is it being used for deferred pensions?

Hello Bill1980, welcome to this thread. I hope you have found it of real use to you.

You are quite right Deferred Benefits will be uprated at CPI from now on. (Unless RPI is hard wired into the scheme rules)

Leaving Hutton out of this for the moment because the Government still has to comment and enact on his recommendations.

As it now stands a pension that is deferred for any reason will be uprated in line with CPI. As you are an active member of your scheme this does not directly affect you until you leave that scheme as I am sure you are aware. However, if you do leave the scheme for any reason then the time between leaving (pension then deferred) and the time when you take your then deferred pension will be less then it otherwise would have been under RPI indexing.

I have said in these posts before that people in employment will also be hit by this change and this highlights one of those hits. Many people are unaware that this change could have a BIG impact on their future pensions should circumstances dictate that they have to defer their pension. If the gap between CPI and RPI is large over a long period of time, we already know it will be 0.8% but it could be much more then the pension will be LESS. So over time the loss could knock 50% off a pension if it is deferred for a long period. Equally, if inflation is low then the loss could be only 15% but your guess is as good as mine what inflation will do over time. Nevertheless, any deferred pension from now on will be less than it otherwise would have been with RPI indexing.

May I suggest that you write to Steve Webb & co and ask him why when the professionals such as the RSS disagree that CPI is a better measure of pensioner inflation, he seems to think the opposite. Perhaps you could ask him to justify his claims and ask him what professional bodies agree with him.

May I also suggest that you inform as many of your working colleagues that this change will effect them and that if the Government get away with calling CPI the official inflation rate, as they keep doing, then it will not be that long before any wage increases will be based on the CPI and not the RPI, as at present.

The official measure of inflation is the Retail Price Index (RPI), the only one enshrined in legislation, because it is used to inflation-protect Government index-linked securities. RPI can not be altered without the Bank of England's consent, the BOE also has a veto but the Government can "fiddle" with CPI hence why I suspect they are so keen to get CPI recognised by the general public and media as the official inflation rate. CPI is NOT the official inflation rate.

It's up to us ALL not to accept CPI!