Pension Increase Query

johnsmithy

Hi

I wanted to ask a query about my pension which I had a query over.

With the annual increases to a pension, do the increases get added to the current value of a pension or from your final salary.

So, for example, if I had £3000 and there was a 2% increase, it'd be worth £3060 or is the increase applied by another means, such as 2% of your final salary when leaving?

Sorry I find this all a bit confusing and am trying to get my head round it. Thanks.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/72429180#Comment_72429180

Is this another question on your deferred Civil Service pension?

http://www.civilservicepensionscheme.org.uk/media/94841/l2_v10_sep2014.pdf

johnsmithy

Thanks but the information provided doesn't really answer the question ��

xylophone

But you have been told by more than one poster that your benefits at leaving are revalued in line with inflation.

Perhaps below might help - it explains your statement.

http://www.civilservicepensionscheme.org.uk/media/209946/deferred-abs-guide-v12.pdf

GunJack

generally, once an increase has been added, the following year's increase is based on the amount _increase..

e.g.

yr 1 - value =1000, increase 2%, end of year value = 1020
yr 2 - value = 1020, increase 2%, eoy value = 1040.40
etc
etc

johnsmithy

Thanks for the help - I was just wondering how the calculation for the increase actually works. Think you've sorted this GunJack. ;-)