Frozen USS pension query

lillyrich

I have a frozen USS pension, built up over 8 years and I left in 2013. Since then my modelled projected payments (both annual and lump sum) have not increased at all - they are literally frozen in time. In reality when I come to claim the pension, will inflation over these years be applied? Otherwise it defeats the point of saving into a pension surely! 

dunstonh

I have a frozen USS pension, built up over 8 years and I left in 2013. 

It won't be frozen (although that term is commonly misused as you have.  So, you are not alone).

 Since then my modelled projected payments (both annual and lump sum) have not increased at all - they are literally frozen in time.

That is normal with deferred pensions.  They update active members annually, but not deferred members.

 In reality, when I come to claim the pension, will inflation over these years be applied?

yes

hyubh

lillyrich said:

I have a frozen USS pension, built up over 8 years and I left in 2013. Since then my modelled projected payments (both annual and lump sum) have not increased at all - they are literally frozen in time. In reality when I come to claim the pension, will inflation over these years be applied? Otherwise it defeats the point of saving into a pension surely! 

https://www.uss.co.uk/for-members/glossary#Glossary_USSstandardpensionincrease

via https://www.uss.co.uk/for-members/leaving-or-already-left/your-pension-after-leaving

lillyrich

Thanks - I've been checking the benefits calculator for ten years and it's just frozen at the same amount - obviously worth a lot less now than ten years ago!

QrizB

If you know the value in 2013 money from when you retired, and you know how it's indexed in deferment (is it CPI?) you can make a good estimate of what it's worth in 2025 money.

hyubh

lillyrich said:

Thanks - I've been checking the benefits calculator for ten years and it's just frozen at the same amount - obviously worth a lot less now than ten years ago!

An online benefit calculator doesn't trump scheme rules. You've had mostly CPI increases, just slightly less than that overall because the increase on your last bit of service is capped.

Assuming your statement of deferred benefits on leaving showed the spit between pre-October 2011 pension and the remainder, you should be able to calculate it yourself easily enough. The following are the uncapped rates: https://www.lgpsmember.org/faqs/how-are-pension-increases-calculated/ ('official pensions' in the link I gave previously = SERPS and public service pension schemes like the LGPS).

Universidad

lillyrich said:

Thanks - I've been checking the benefits calculator for ten years and it's just frozen at the same amount - obviously worth a lot less now than ten years ago!

USS doesn't have perfect inflation matching, so the pension is actually worth a bit less in real terms than it was all of those years ago, due to a couple of years post-pandemic where inflation was above 5%, and that inflation was not fully matched. 

But as others have said, it will have risen almost in line with inflation. 

10,000 pounds in 2013 is now worth about the same as 14,500 pounds today, thanks to inflation. 

If you had a USS pension worth 10000 pounds in 2013, it would be worth about 14000 per year, as of next April. (That's actually including the upcoming 2026 inflationary increase, the amount of which is known). 

So it's enough to be felt, but probably not enough to derail most folks retirement plans.