Occupational Pensions Revaluation Order 2023 Now available

Pat38493

The revaluation order for 2023 is now available here:

https://www.legislation.gov.uk/uksi/2023/1265/made

I'd like to thank the members of this board for drawing my attention to this - this was one of the first things I found out after frequenting this board and I am pretty sure this will gain me many thousands of pounds over my lifetime once I decide to put my pension into payment, by making sure that I don't pick the wrong date in the year.  In my case with my pension deferred in May 2008, it looks like my pension would be uplifted by 57.1% instead of 49.6% if I decided to put it into payment after the deferral date.  To add insult to injury, the 49.6% is actually lower than the following year!

leosayer

Thanks for posting.

One observation from looking at the publication is that you can really see the impact of recent high inflation when comparing the higher revaluation rate to the lower one.

For example, if you deferred in 2017 then the difference is almost 12% (30.6% vs 18.9%).

The difference is less marked in other years, for example only 5% since 2009.

It would be interesting to know how far both of these are away from CPI, to calculate how much purchasing power has been lost due to recent high inflation and the caps.

hugheskevi

leosayer said:

For example, if you deferred in 2017 then the difference is almost 12% (30.6% vs 18.9%).

The difference is less marked in other years, for example only 5% since 2009.

It would be interesting to know how far both of these are away from CPI, to calculate how much purchasing power has been lost due to recent high inflation and the caps.

Between Jan 2017 - Oct 2023 CPI increase was 30.2% (Revaluation Order is 30.6% vs 18.9% for the 5% / 2.5%caps)
Between Jan 2009 - Oct 2023 CPI increase was 55.5% (Revaluation Order is 49.6% and 44.8%)

Jonty6262

Not a clue how to understand this.Does it affect all types of pension? DC, DB, Deffered? Any working examples? 

leosayer

The tables tell you how much your deferred DB pension has increased from the date you left the scheme until now.

When you get a DB pension statement, it should show the pension amount broken down into different slices with increases capped at different rates as follows: 2.5% for the lower rate' column in the link and 5% for the 'higher rate' column.

Here's the description of the slices from my DB statement:

The scheme pension (over the GMP) built up before 6 April 1997, and the whole pension built up between 6 April 1997 and 5 April 2009 will be increased in line with price inflation or 5% a year, whichever is lower.

The scheme pension built up after 5 April 2009 will be increased in line with price inflation or 2.5% a year, whichever is lower.