Annual Increase in Contracted-Out Deduction Question.

Judesman

I have received my Pension Service advice re. my increased state pension. Every year my pre-97 additional state pension is increased by CPI.  (I was contracted out with my previous employers). From this is deducted my Contracted-Out deduction that always exceeds my Pre-97 additional state pension so I do not receive anything. I understand that but what I do not understand is how the Contracted-Out Deduction is increased every year.  It is not in line with CPI but, how is this small annual increase calculated?  Can anyone help please?

xylophone

See https://forums.moneysavingexpert.com/discussion/comment/79901848/#Comment_79901848

Judesman

Xylophone, thanks for the reply and link. It has been so long since we have seen an inflation rate over 3% that I had forgotten the significance of this figure. This year and last year my COD increased by 3% but in previous years the increase was limited to CPI (A much lower figure.) The 3% increase is the maximum allowed by my scheme I believe. After tinkering by successive Governments I am not surprised some of us have difficulty understanding it all.  Thank you.