Company Pension Rise

caveman38

I understand the the SP for 2023 will rise in line with the inflation rate declared in September - unless the rules change again. But what is the figure used for company pensions eg. my BT pension?

Dazed_and_C0nfused

It's the rate as laid down in the scheme rules.

Which specific BT pension is it?

This should explain though,

https://www.btps.co.uk/NewsDetail?a=55#:~:text=the pension increase-,Percentage increase for 2022/23,cap of 5 per cent.

skycatcher

It depends on which scheme you're in A,B,C and what options you took at retirement.

arnoldy

Most private sector DB pensions will have elements that rise at 0%, 2.5%, 5% maximum. I suspect the BT scheme will be in this category. Approximately you can expect a rise of about 2.5%-3% this year, this being a typical blended composite rate. With inflation predicted to be at least 13% this year, and be persistent over the next few years,  private sector DBs are going to be slaughtered. 

The scary thing is the loss of value for private sector DBs is guaranteed, and it remains the case they are horribly exposed to inflation - something you have no control over!!

That's why there were so many poor pensioners in the 70s and 80s - following the high inflation that destroyed their pensions.

caveman38

I believe that I am in A or B as I got 3.1% this year. I will see if I can confirm this but I am unaware of a cap but also doubt I'd get 10% in April 24.
Thanks for the replies

molerat

The basic pension rises are :

A & B : September CPI uncapped

C : December RPI capped at 5%

That is for the pension above the GMP. Various rates apply to the GMP element

There are also others elements in play with different rates.

2022 guides here https://www.btps.co.uk/NewsDetail?a=55

https://www.btps.co.uk/mediaarchive/schemesite/btps payslip guide 2022 sections A&B.pdf

https://www.btps.co.uk/MediaArchive/SchemeSite/BTPS Payslip Guide 2022 Section C.pdf

hyubh

arnoldy said:

Most private sector DB pensions will have elements that rise at 0%, 2.5%, 5% maximum. I suspect the BT scheme will be in this category. Approximately you can expect a rise of about 2.5%-3% this year, this being a typical blended composite rate.

The larger part of the BTPS pensioner population is actually on quasi-public sector terms, though admittedly the OP's section could well be the one with RPI (not CPI) capped to 5%...

caveman38

I can confirm that I am Section B. As such - from above info - will receive next April,  Septembers CPI announced figure, which is currently 10.1%. Is that correct?

xylophone

See page 19 of Scheme Guide here

https://www.btps.co.uk/MediaArchive/SchemeSite/Section B Member booklet 2017.pdf

AlanP_2

caveman38 said:

I can confirm that I am Section B. As such - from above info - will receive next April,  Septembers CPI announced figure, which is currently 10.1%. Is that correct?

Apart from the fact that September's CPI hasn't been calculated yet let  alone announced.

Indications see to point towards higher than July's. 

QrizB

AlanP_2 said:

caveman38 said:

I can confirm that I am Section B. As such - from above info - will receive next April,  Septembers CPI announced figure, which is currently 10.1%. Is that correct?

Apart from the fact that September's CPI hasn't been calculated yet let  alone announced.

No, but the index values to date are known.

• In September 2021 the CPI index was 112.4.
• The value for July 2022 is 122.5

So we've already had a rise of very nearly 9%, and there are still two months to go.