Rules on using Occupational Pensions Revaluation Orders

Pat38493

zagfles said:

Notepad_Phil said:

So have I got the following right for an example of a deferred final salary pension with a retirement date this year of say the 10th August 2021?

I would look through the "The Occupational Pensions (Revaluation) Order 2020" ( https://www.legislation.gov.uk/uksi/2020/1332/made ) and use the figure for "1st January 1995 - 31st December 2020" i.e. 86.2% if if I had left employment on the 11th August 1994.

But, if I had left on the 9th then I would use the figure for "1st January 1994 - 31st December 2020" i.e. 90.3%

Yes. Deferment is revalued on whole years, and the years that count are last year back the number of whole years of deferment. So if you take the pension later in the calendar year to when you left, you go from 1st Jan of the year you left to 31st Dec last year. If you take it earlier in the calendar year you go from the year after you left.

Note that if you have GMP this is revalued completely differently, there are various methods but the usual one is fixed rate, and that applies over tax years. The above applies to excess over the GMP.

I have another question on this topic,

According to the government table, the growth from 2008 to now for example is 33.8%

However, if I search on google for UK inflation sites and looking how much the value of my money changed from 2008 to 2022, it says it went up by 42%.

Does this mean that the OPRO is short changing DB pension holders?  If so, why would the government do that because I understood that these orders mainly affect private pension schemes and so there is no taxpayer money involved.

Notepad_Phil

The results you found possibly use RPI whilst OPRO is using CPI to a max of 5% and 2.5%. The OPRO tables are also based on average inflation rates between the two years i.e. it's not the simple case of calculating inflation from January of one year to January of a later year.

Does that make your figures look more in tune with OPRO?

Pat38493

Hmmm - well actually I looked on this site first

https://www.in2013dollars.com/uk/inflation/2008

This is the one that gives 42%

However I found another site

https://www.inflationtool.com/british-pound/2008-to-present-value?year2=2022&frequency=yearly

The second site gives 33.5% as per the government table.

The first site also claims that they use CPI so I am not sure how they get such different numbers.