Inflation

Sterlingtimes

CPI inflation over 10 years can be approximated from the Bank of England calculator https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator
I calculate 31%, an average of 2.7% per year.

By reference to State pension to rise by up to £289 in 2022 – Which? News the State Pension during the same period is 35%.

NHS pay has remained static in real terms which means that NHS pay increases have averaged 2.7% over 10 years (the same as CPI).

The triple lock leaves pensioners slightly more advantaged albeit that pensioners on State Pension only may be more burdened by price increases, particular with home energy.

Sterlingtimes

It may be that the pensioner who is an owner-occupier without a mortgage may be able to struggle along with CPI rather than RPI. Additionally, a non-working pensioner will not be burdened by increased National Insurance. However, it may be that the pensioner being at home all day may be disproportionately hit by increasing home energy price increases.

Savvy_Sue

Sterlingtimes said:

It may be that the pensioner who is an owner-occupier without a mortgage may be able to struggle along with CPI rather than RPI. Additionally, a non-working pensioner will not be burdened by increased National Insurance. However, it may be that the pensioner being at home all day may be disproportionately hit by increasing home energy price increases.

I thought working pensionERs (over SPA) didn't have to pay NI any more?

Edited for clarity, put pensions not pensioners (I blame the autocorrect)

CKhalvashi

Sterlingtimes said:

Clowance said:

nhs workers got 1% for the last several years and are not likely to get this mythical 8,7pc. Obviously the government feel they are not worth it!

I did check this out here: How has NHS staff pay changed over the past decade? - The Health Foundation

In real terms (accounting for inflation), the NHS pay has almost remained static.

They haven't though for many.

Someone who was at the top of their band 10 years ago is significantly worse off compared to 10 years ago.

This includes the longest serving and experienced staff in their departments who can spot potential health problems being given no incentive so stay. Cheaper doesn't necessarily mean better, especially in sectors such as health.

blue.peter

Savvy_Sue said:

I thought working pensions (over SPA) didn't have to pay NI any more?

I'm not quite sure exactly what you mean. The word "pensions" is a bit confusing to me. Perhaps you meant "people"? If so, you're right. See here:

When you stop paying

If you’re employed, you stop paying Class 1 National Insurance when you reach the State Pension age.

If you’re self-employed you stop paying:

• Class 2 National Insurance when you reach State Pension age
• Class 4 National Insurance from 6 April (start of the tax year) after you reach State Pension age

You also don't pay NI on pensions, even if you're under SPA. (I'm 63, and haven't paid NI since I ceased employment in 2015.)

Sterlingtimes

Savvy_Sue said:

Sterlingtimes said:

It may be that the pensioner who is an owner-occupier without a mortgage may be able to struggle along with CPI rather than RPI. Additionally, a non-working pensioner will not be burdened by increased National Insurance. However, it may be that the pensioner being at home all day may be disproportionately hit by increasing home energy price increases.

I thought working pensions (over SPA) didn't have to pay NI any more?

Sorry, I ought to have been clearer. For those earning over the threshold when NI kicks in – currently £9,568 a year – there will be a 1.25 percentage point levy on earnings over that sum.

Thrugelmir

Sterlingtimes said:

Clowance said:

nhs workers got 1% for the last several years and are not likely to get this mythical 8,7pc. Obviously the government feel they are not worth it!

I did check this out here: How has NHS staff pay changed over the past decade? - The Health Foundation

In real terms (accounting for inflation), the NHS pay has almost remained static.

Don't forget the value of the NHS pension . Why are so many people retiring early? Because they can afford to do so. 1995 scheme was based on final salary. The recent increases bump up the pension. 

Sterlingtimes

Thrugelmir said:

Why are so many people retiring early? 

Of course, there are many Governmental actions that may move the more highly paid into early retirement: LTA, IR35, National Insurance Supplement. The mass firing of the unvaccinated (as wise as that may appear) could also cause an unexpected exit.

Savvy_Sue

Sterlingtimes said:

Savvy_Sue said:

Sterlingtimes said:

It may be that the pensioner who is an owner-occupier without a mortgage may be able to struggle along with CPI rather than RPI. Additionally, a non-working pensioner will not be burdened by increased National Insurance. However, it may be that the pensioner being at home all day may be disproportionately hit by increasing home energy price increases.

I thought working pensions (over SPA) didn't have to pay NI any more?

Sorry, I ought to have been clearer. For those earning over the threshold when NI kicks in – currently £9,568 a year – there will be a 1.25 percentage point levy on earnings over that sum.

Yes, but not for those still working while claiming SP. Your mention of non-working pensioners not paying the increased NI had me worried, because I'm anticipating claiming my SP before I stop working!

PennyForThem_2

The NHS pension increased by 0.5% last year.  As did many PA pensions including the state pension.  Not long before this increase erodes the value.  The  value won't keep up in proportion with the final salary equivalent on the day retired IMHO.

Yes, I know, gold standard etc and I am glad I have a db penson rather than a SIPP where I have to make the decisions as to how much to draw down.  And not all PA pensions are equal - look at MPs and civil servants pension schemes - think better than NHS pension.

However my widow's payment from an annuity bought around 2008 increases by 4% pa  - only this year am I going to experience a 'loss' in keeping up with inflation!