Next Year's Pension Increases

[robking]

The September rate of inflation is the month that is used to determine the rate of increase applicable from 1st of April next year.

Section A/B members pension increases are based on the rate of inflation measured by the Consumer Price Index (CPI) and there is no cap. The rate of CPI inflation announced on Wednesday was 6.7% so section A/B members pensions will be increased by that amount from April 2024.

Section C members increases are based on the Retail Prices Index (RPI) but are subject to a cap of 5%. The RPI rate of inflation in September was 8.9% so section C members will receive the capped 5% increase.

Because of this cap, this is the second successive year that section A/B members have received a larger pension increase that their section C counterparts. However because RPI tends to be higher than CPI, when inflation is below 5% section C members tend to do better.

https://www.ons.gov.uk/economy/inflationandpriceindices

[guardianangel]

Whatever happens you can guarantee the workers get ripped of and investors bank a shed load.

[freespeech]

The September rate of inflation is the month that is used to determine the rate of increase applicable from 1st of April next year.

Section A/B members pension increases are based on the rate of inflation measured by the Consumer Price Index (CPI) and there is no cap. The rate of CPI inflation announced on Wednesday was 6.7% so section A/B members pensions will be increased by that amount from April 2024.

Section C members increases are based on the Retail Prices Index (RPI) but are subject to a cap of 5%. The RPI rate of inflation in September was 8.9% so section C members will receive the capped 5% increase.

Because of this cap, this is the second successive year that section A/B members have received a larger pension increase that their section C counterparts. However because RPI tends to be higher than CPI, when inflation is below 5% section C members tend to do better.

https://www.ons.gov.uk/economy/inflationandpriceindices

Given the DBCBS got 11% this year does that mean it will get the 8.9% next year?

[robking]

I don't know the precise rules of the DBCBS but isn't the return based on investment performance?

[RobertT]

The target amount of the annual discretionary DBCBS increases is CPI, plus a maximum of 4%.

There's no guarantee there will be any annual bonuses, but once they're added, they're guaranteed.

Your DBCBS pot can't reduce in value.

These are the annual DBCBS increases so far, with CPI in brackets:

2020 – 3.7%(1.7%)
2021 – 1.7%(0.5%)
2022 – 4.6%(3.1%)
2023 – 11.3%(10.1%)

[Thailand1]

FAO Robert

Hi Robert,

I am not complaining but just would like to know why my recent pension A/B NRA 65 forecast statement appears to have an increase of around 13% not 10.1 (CPI rate 2022).

It is both lump sum and annual pension. Is there any hidden factors the way the pension team calculate it?

Thanks in advance.

[RobertT]

FAO Robert

Hi Robert,

I am not complaining but just would like to know why my recent pension A/B NRA 65 forecast statement appears to have an increase of around 13% not 10.1 (CPI rate 2022).

It is both lump sum and annual pension. Is there any hidden factors the way the pension team calculate it?

Thanks in advance.

I think someone else on here said something similar a few weeks ago.

To be honest, I'm unsure why the increase is higher.

[Thailand1]

Thanks Robert

[renrag40]

FAO Robert

Hi Robert,

I am not complaining but just would like to know why my recent pension A/B NRA 65 forecast statement appears to have an increase of around 13% not 10.1 (CPI rate 2022).

It is both lump sum and annual pension. Is there any hidden factors the way the pension team calculate it?

Thanks in advance.

I think someone else on here said something similar a few weeks ago.

To be honest, I'm unsure why the increase is higher.

That was probably me.
RPI September 2021 was 4.9%
RPI September 2022 was 12.6%
1.049 × 1.126 = 1.181174% which is the rise that my RMSPS pensions have risen since the 2021 statement.... which was what I was querying as I thought there was a 5% cap on yearly increases for active members of Sections A/B..... it would appear that I was wrong.

[Thailand1]

Ummmm interesting but A/B pension is a CPI based increase not RPI.

Comments welcome.

[renrag40]

RPi while still actively paying into either the RMPP or RMSPS pensions.
CPI once you take the pension.
So if you have taken your nra 60 pension rises will be CPI.
If you have not taken your NRA 65 pension the RMSPS rise will be RPI and the RMPP pension rise will be RPI capped at 5%.

[robking]

RPi while still actively paying into either the RMPP or RMSPS pensions.
CPI once you take the pension.
So if you have taken your nra 60 pension rises will be CPI.
If you have not taken your NRA 65 pension the RMSPS rise will be RPI and the RMPP pension rise will be RPI capped at 5%.

There can't be many people who are active members of Section B and who have not yet taken at least their NRA60 pension, there will be more deferred members who are still under 60 I should think.
Everybody who was in Section A is now a pensioner and in about 5 years time everybody who was ever in Section B will be too.

[renrag40]

RPi while still actively paying into either the RMPP or RMSPS pensions.
CPI once you take the pension.
So if you have taken your nra 60 pension rises will be CPI.
If you have not taken your NRA 65 pension the RMSPS rise will be RPI and the RMPP pension rise will be RPI capped at 5%.

There can't be many people who are active members of Section B and who have not yet taken at least their NRA60 pension, there will be more deferred members who are still under 60 I should think.
Everybody who was in Section A is now a pensioner and in about 5 years time everybody who was ever in Section B will be too.

I'm 59 ........ 38 years, 3 months and 27 days ....... you wouldnt get a sentence that long for murder..... can't wait to go...... any VR?