Deferred Pension query.

MABLE

I have a deferred pension with an ex employer and it is in a final salary scheme. I have received details today and it states that the DP in excess of GMP will increawe each year at the rate of 2.5 percent per annum until retirement date.
It then says GMP will increase each tax year at the rate of 4.5 peercent per annum until retirement date.

I dont worry understand the meaning of the above. I am to assume my final salary pension then would grow at 7 percent in total up until retirement.

Thanks,

EdInvestor

I think it probably means that the part of the pension which replaces the Serps/S2P state pension will rise by 4.5% p.a, and the other part will rise by 2.5% p.a. You really need to know what proportion of the total pensiuon is made up by the contracted out money to get an overall view.