Civil Service Pension CPI Increases

Quizmaster123

I took my Civil Service Classic pension in September 2022, aged 54, using the employer buyout option along with surrendering my redundancy payment. In July 2023, I received a CPI increase when I reached 55.  This was pro-rata'd for the month of my birthday and then paid in full each month after.  I've read somewhere that although you don't receive CPI increases until you're 55, you should then receive the CPI increases that would have been applied from the date you retired.  Can anyone confirm that I should have received CPI arrears from Sept 2022 to July 2023 when I reached 55?

hugheskevi

Quizmaster123 said:

I took my Civil Service Classic pension in September 2022, aged 54, using the employer buyout option along with surrendering my redundancy payment. In July 2023, I received a CPI increase when I reached 55.  This was pro-rata'd for the month of my birthday and then paid in full each month after.  I've read somewhere that although you don't receive CPI increases until you're 55, you should then receive the CPI increases that would have been applied from the date you retired.  Can anyone confirm that I should have received CPI arrears from Sept 2022 to July 2023 when I reached 55?

No arrears are payable, there is just an increase from 55th birthday that will take account of all increases from the date the pension started.

Quizmaster123

Thanks for the reply.  The only increase I received was the proportionate increase wef my 55th.  So, nothing which took account of when I retired up to my 55th.  I recently read that you don't get any increases till you're 55 but that these should then be backdated to when you retired, which I never got. 

hugheskevi

So the key dates are:

• Commenced pension September 2022
• Reached age 55 in July 2023

So you should have received the same amount of pension from September 2022 to July 2023, and in July 2023 the pension should have been uplift to account for inflation between September 2022 to April 2023. Then you receive normal annual increases each April thereafter.

April 2023 uprating was 10.1% and you would have been entitled to 7 months of uprating, or about 5.9% uplift that would have been applied from July 2023. No arrears are due, so it is just the ongoing pension that gets uplifted.

What increase did you receive in July 2023?

Quizmaster123

It was 5.89% I received in July 2023 so fairly spot on.  The only reason I questioned it is because a number of people on different forums have been talking about getting their pension increases backdated to the date they retired, in cases where they retired before they were 55.   Having said that, I couldn't find anything on the CS pensions website to suggest it would be backdated.

Silvertabby

Quizmaster123 said:

It was 5.89% I received in July 2023 so fairly spot on.  The only reason I questioned it is because a number of people on different forums have been talking about getting their pension increases backdated to the date they retired, in cases where they retired before they were 55.   Having said that, I couldn't find anything on the CS pensions website to suggest it would be backdated.

A common misunderstanding, especially with Armed Forces pensions.  Flat line from date of payment (which could be age 40) then CPI applied from age 55.  But it's just the rate of CPI that's backdated to the date of leaving, not the actual pension.  

Quizmaster123

Sorry, I'm confused - what do you mean by the rate of CPI being backdated rather than the pension itself?

Silvertabby

Quizmaster123 said:

Sorry, I'm confused - what do you mean by the rate of CPI being backdated rather than the pension itself?

Ok, in VERY round figures for explanation:

Retire from RAF at age 40 on an immediate pension of £10K.

Pension flat lines until age 55

At age 55 the CPI increase factor from age 40 (the same tables as used to calculate cost of living increases for deferred records) is 1.50.  £10K X 1.50 = £15K.

Going forward, the pension from age 55 is £15K per year with no backdated arrears being due.  Revised pension then increases each year in line with CPI.

Quizmaster123

Thank you for clarifying - at least I know it's one less thing to chase MyCSP about.

moo121

I wonder if you were thinking about this thread?

https://forums.moneysavingexpert.com/discussion/6027643/civil-service-pension-query

I left CS at age 47 and took my actuarially reduced deferred pension when I was 51.

Following on from the discussions in the linked thread I was ready to check how the pensions increase was applied when I hit 55.   MyCSP seemed to automatically apply my monthly pensions increase which had substantial backdating but they "forgot" to pay my increased lump sum, which I queried.

They got their sums wrong in the first letter they wrote, but eventually got it right and explained my monthly pension was increased by the PI due from my deemed date (date I left and pension was deferred) to the last PI date prior to my 55th birthday.  Then they applied the PI that followed my 55th birthday (I'm a March baby and it was August by the time of the letter). 

The lump sum was also eligible for a pension increase, this was calculated from my deemed date to date I originally took my benefits, which they finally paid after several emails, 2 letters and 5 months late (over 1.6k).  If I hadn't read about it on MSE, I wouldn't have known it was missing.

They are not infallible. If you are unsure, then it may be well worth asking them to check and explain their figures.  It took several goes before they got it right for me.

Quizmaster123

moo121 said:

I wonder if you were thinking about this thread?

https://forums.moneysavingexpert.com/discussion/6027643/civil-service-pension-query

I left CS at age 47 and took my actuarially reduced deferred pension when I was 51.

Following on from the discussions in the linked thread I was ready to check how the pensions increase was applied when I hit 55.   MyCSP seemed to automatically apply my monthly pensions increase which had substantial backdating but they "forgot" to pay my increased lump sum, which I queried.

They got their sums wrong in the first letter they wrote, but eventually got it right and explained my monthly pension was increased by the PI due from my deemed date (date I left and pension was deferred) to the last PI date prior to my 55th birthday.  Then they applied the PI that followed my 55th birthday (I'm a March baby and it was August by the time of the letter). 

The lump sum was also eligible for a pension increase, this was calculated from my deemed date to date I originally took my benefits, which they finally paid after several emails, 2 letters and 5 months late (over 1.6k).  If I hadn't read about it on MSE, I wouldn't have known it was missing.

They are not infallible. If you are unsure, then it may be well worth asking them to check and explain their figures.  It took several goes before they got it right for me.

Mine has similarities, but is a slightly different situation.  My Classic pension wasn't deferred as I took it early at 54 in exchange for my redundancy payment.  The only increase I've had is a PI increase on my 55th in July 2023 which was 7/12 of the full increase (I left in Sept 2022).  I thought it would be backdated to the last PI date of April 2023 but it wasn't.   

If they got it right, it would mean anyone leaving and taking their pension early would not receive any cost of living increase which doesn't seem right to me.

I have to say though, I'm finding it all really confusing !  You may be right in that it's worth asking them the question.