RPI to CPI Early Day Motion 1032

JohnB47

spenderdave wrote: »

Actually the old Ferranti pension scheme is somewhat unusual for a company which went bust. Due to very careful management in the 1980s, when the company went into administration in 1991 the pension scheme was very well funded. Being a closed scheme with a fixed number of members it now has more than adequate funds to meet its obligations. Index linking is capped at 5% by the scheme, so this RPI change is really just a tidying up exercise.

I will be very pleased when my pension starts being paid in 3 years time...

Thanks. Enjoy your pension.

It's really great that your provider has done this but I'm really intrigued as to why. Surely, like others tied to the governments change from RPI to CPI, they could have simply have ignored any moral obligations that future and current pensioners might believe they have.

So what made them do it? And could that reason, whatever it is, also apply to other providers in the same position?

shaunrc

For those who are following this matter I wrote yesterday on my economics blog about why the March inflation numbers for the Consumer Price Index were so different from those for the Retail Price Index measure. If you are going to have your indexation switched from one to the other this does matter.

It can be found on http://www.mindfulmoney.co.uk/wp/author/shaun-richards/

ordinaryman

To all who have supported the fight against the Coalition's decision to uprate Pensions and Benefits by the CPI and not the RPI.

At last! The Police Service, supported by other Public Sector Associations are submitting papers for a Judicial Review prior to legal action against the Coalition's policy to rob us of our entitlements.

Let us hope that a class action is mounted by a team of good lawyers to try and reverse this Pensions and Benefits robbery. If it gets to the High Court and a convincing case is made then we could see some justice served against this totally reprehensible Government and its completely unethical methods.

The Empire Strikes Back!:T

Goldwing1

Excellent news.

Dominic9

Using figures from the Office for Budgetary Responsibility for RPI and CPI forecasts, it would seem that they now think the difference between RPI and CPI is even bigger, 1.2% in the long run, and even larger in the short run.

To show what that means, here are some examples using the OBR RPI and CPI forecasts:

1) Someone currently aged 60 will have a pension which is 8% lower in 5 year's time, 13% lower after 10 years and 22% lower after 20 years than it would have been under RPI uprating.

2) Someone currently aged 40 with a deferred pension will now have a pension which is 22% lower than it would have been at age 60 under RPI uprating, and 31% lower at age 70.

It is a shame that a lot of people seem to be unaware that this affects existing pensioners - an 8% fall in income over 5 years is hard to adjust to when you are no longer in employment and have no way to respond over than to reduce spending.

Interested_Taxpayer

ordinaryman wrote: »

At last! The Police Service, supported by other Public Sector Associations are submitting papers for a Judicial Review prior to legal action against the Coalition's policy to rob us of our entitlements.

Here are the First Division Association, Prospect and CSPA reports of the Judicial Review. Application launches on Monday. Good news indeed!
But where are the other Unions and Retired Associations whose pensioners are affected by this?

www.fda.org.uk/Media/Union-mounts-legal-challenge-to-unacceptable-pensions-change.aspx

www.prospect.org.uk/news/newsstory.php?news=891

www.cspa.co.uk/index.htm

teacher_retired

Interested_Taxpayer wrote: »

Here are the First Division Association, Prospect and CSPA reports of the Judicial Review. Application launches on Monday. Good news indeed!
But where are the other Unions and Retired Associations whose pensioners are affected by this?

www.fda.org.uk/Media/Union-mounts-legal-challenge-to-unacceptable-pensions-change.aspx

www.prospect.org.uk/news/newsstory.php?news=891

www.cspa.co.uk/index.htm

Sunday Mail Finance gives issue a full page spread today. Its stance is ambiguous but over the weeks it appears to be that it is a gross injustice to the private sector but well deserved for the public sector.

Thicko2

good luck to the FDA et al.

Ripoff_2

Hi All,

After writing to Cameron, Osbourne and Clegg I got yet another standard letter from the DWP but there is one sentance in it that I have not seen before, maybe some of you have but it's very interesting to me, read on.

I quote "The intention of benefit and pension indexation is to protect their purchasing power, not to give the highest increase
possible. Increases in line with the growth in the CPI maintain benefit and pension value, as well as putting the system on a more sustainable footing,allowing us to focus help where it is needed most."

Note the words purchasing power, they are not, it would appear including council tax (housing costs) as a purchased item then? because as it stands CPI missing council tax (housing Costs) and vehicle excise duty, can not by default, maintain purchasing power can it?

They then go on to say that work is still at an early stage to include housing costs, so one minute CPI maintains purchasing power but in the next sentence they admit that with missing housing costs then it can't really do that (odd to me that). Then they say if housing costs are included in the future they will look to see if that is then a better measure. So they are then saying CPI might well not be the best measure and thus their argument is not viable is it, it's a nonsense, their stance is complete rubbish isn't it?

I do hope the judicial review highlights some of this trickery and nonsense the Government are peddling.

regards

Ripoff

JamesU

Dominic9 wrote: »

2) Someone currently aged 40 with a deferred pension will now have a pension which is 22% lower than it would have been at age 60 under RPI uprating, and 31% lower at age 70.

It is a shame that a lot of people seem to be unaware that this affects existing pensioners - an 8% fall in income over 5 years is hard to adjust to when you are no longer in employment and have no way to respond over than to reduce spending.

Hi Dominic, do you have a link to the OBR document where the bolded calculation is discussed so explicitly? I seem to have missed this one. Thanks.

JamesU