GMP

Tony.B_8

Now heres a con.
My Ex Service Pension for 20 years in HM Coastguard is index linked.
This year from April I should have got 2.8%
BUT
As I retired after 1988 my increase notice says
.
"Your pension has a GMP element so you will receive only part of the full increase."
.
So I should have got a miserable Pension increase or 2.8% (which I pay tax on) but I don't even get it all.
They sent a note "explaining" GMP but it is gibberish.
They have probably done the same to my 25 year Royal Navy Pension as well.
:-[

Pal

It is not a con at all, but a feature of the way contracting out used to work.

On GMP earned before 1988 you do not get any annual increases from your pension scheme, and on GMP earned after 1988 until 1997 (when they stopped being earned) you will get RPI up to a maximum 3% p.a.

However GMPs actually receive full RPI increases each year, with the amount of the increase that is not paid by your pension scheme instead being added to your state pension and paid with that. So you don't lose out at all.

Ask the DWP for confirmation of how your state pension has been increased to check that this has actually happened. There might be a slight difference if the annual increase in your state pension differs from the date of the annual increase in your forces pensions, but in the long run it all evens out.

Who said pensions were complicated?