DB Pension and Inflation

MuddyFunster2

Hi,

I'm sure this is really simple, but I cannot find an answer trawling through various websites and my pension fund portal.

Will my DB pension, that I've left and can't contribute to, rise with inflation?

I'm 'only' 45, but (probally later than I should) I'm looking into retirement planning for the first time. 

I've got a Defined Benefit Pension, a Natwest Group Pension Fund, I left the Bank in 2009.

I've just got a pension quote from it, retire at 65 and they'll give me either £8k a year in pension, or £6k a year and £40k (figures rounded for ease) along with my current Nest Pension and state pension, it seems like a comfortable retirement considering I'll be mortgage free, kids grown up etc.

But, if that quote is the same in 20 years, it'll be worth maybe half what it is now, and I'll need to do something about it now. 

Flugelhorn

you need to check the whether they revalue deferred pensions and how they do it - this is what the RBS say (think it might be the same plan now)

"Your pension is calculated in the same way as your Standard Pension, based on your Final Pensionable Salary and Pensionable Service when you leave service. The pension will then be ‘revalued’ (increased) until retirement (currently this increase is in line with Retail Price Index up to a maximum of 5% per annum compound)"

Secret2ndAccount

Yes, this is going to be company-specific I'm afraid. You need to find your scheme rules. Different employers revalue at rates ranging from 0% to 7% or inflation. Even though you may have only paid into one scheme, it's quite likely your pension is split into two parts which revalue at different rates. Do you get an annual letter? My company is very good about keeping me up to date with revaluations, and it is easy to find the scheme rules.  Others on here struggle to get the information they want. Look at any paperwork you have; look at the company pensions website; maybe contact your scheme administrator. They aren't obliged to give you all the valuation information you might wish for, but you should be able to get the scheme rules so you can have a go at calculating the value yourself.

xylophone

You are aged 45 - were you a member of the scheme pre 6/4/97?