GMP increase 2022

Al_S

Hi all  

My hubby has a small pension in payment from Dairycrest. It has a pre 88 GMP which receives no increase in payment and a post 88 element which receives the CPI increase capped at 3%.

He asked them what increase will be applied to the post 88 portion from April 2022 and was told it is 0.5%.

The annual CPI increase was 3.1% so if capped at 3%, should this increase not be 3%?

Am I missing something obvious here? Happy to be out right if I am. 

Regards 

TadleyBaggie

Just checked mine (not Dairycrest), the post-88 GMP increase is 3%. I also had a larger fixed amount that had never increased in the 6 years I had been taking the pension, and that also got a 3% increase.

Marcon

Al_S said:

Hi all  

My hubby has a small pension in payment from Dairycrest. It has a pre 88 GMP which receives no increase in payment and a post 88 element which receives the CPI increase capped at 3%.

He asked them what increase will be applied to the post 88 portion from April 2022 and was told it is 0.5%.

The annual CPI increase was 3.1% so if capped at 3%, should this increase not be 3%?

Am I missing something obvious here? Happy to be out right if I am. 

Regards 

Suggest he goes back to the scheme, points out the CPI increase was 3.1% and asks them to confirm the GMP increase from April 2022. Most likely explanation is that someone gave him the wrong answer - doesn't mean the actual pension payment he'll receive would be wrong!

xylophone

My hubby has a small pension in payment from Dairycrest. It has a pre 88 GMP which receives no increase in payment and a post 88 element which receives the CPI increase capped at 3%.

Your husband should see an increase of 3% in  that part of his scheme pension that represents his post 88 GMP.

xylophone

Most likely explanation is that someone gave him the wrong answer -

Perhaps confused with increase in April 2021?

Example from ICI Scheme

https://www.icipensionfund.org.uk/documents/gmp-increase-leaflet-042021.pdf

Tommyjw

2021 was indeed 0.5%, sounds like the person on the phone got it wrong and (you'd hope...) you expect they'll do it right for the increase. I'd contact again to be sure.

MrsAlpine

Thanks for the confirmations. He had a letter telling him to amount of increase in pounds, it looked minute, even though the post 88 part is small hence him asking them. 

Their email said the increase was 0.5% which fits rhe  amount on the letter. If anyone here is with Dairy Crest, you might want to check yours is correct.

On a separate note, we have only recently bocome aware that while pre 88 gmp does not receive an increase any more that if you were in a public sector scheme you d get the increase.

Anyone else slightly miffed about that? No offence if you are in a public sector scheme. 

hyubh

MrsAlpine said:

On a separate note, we have only recently become aware that while pre 88 gmp does not receive an increase any more that if you were in a public sector scheme you d get the increase.

For members who reach state pension age on or after 6/4/16. A private sector could do the same if it wanted...

xylophone

. A private sector could do the same if it wanted...

https://forums.moneysavingexpert.com/discussion/comment/79085379/#Comment_79085379

xylophone

On a separate note, we have only recently bocome aware that while pre 88 gmp does not receive an increase 

This  may not be accurate if you are referring to the  arrangements under the old state pension.

See

https://pensions.gov.scot/guaranteed-minimum-pension-gmp

But there can be cases where in effect no increase is received (where the pre 97 ASP is higher than the COD because a person had a deferred occupational pension which used "fixed rate" in revaluing the GMP in deferment.

https://forums.moneysavingexpert.com/discussion/4532605/totally-confused-by-contracted-out-deduction-letter/p3

MrsAlpine

Thanks xylophone, no he reached SOS in 2018.