index linked pension

[dnorman1]

Can anybody please tell me if the Royal Mail Pension is index linked.

[RobertT]

There are different answers to your question depending on the exact scheme you're in and whether you're still employed by RM or not.

1) The final salary pension(for service up to April 2008) increases by CPI for deferred members but is still based on final salary for current members.
2) The career average pension(for service after April 2008) will increase by CPI for deferred members and RPI for current members.
3) If you're already retired your pension will increase by CPI.
4) If you started with RM after April 2008 you will be in a separate 'money purchase' scheme which has no link with inflation whatsoever.

[easter bunny]

There are different answers to your question depending on the exact scheme you're in and whether you're still employed by RM or not.

1) The final salary pension(for service up to April 2008) increases by CPI for deferred members but is still based on final salary for current members.
2) The career average pension(for service after April 2008) will increase by CPI for deferred members and RPI for current members.
3) If you're already retired your pension will increase by CPI.
4) If you started with RM after April 2008 you will be in a separate 'money purchase' scheme which has no link with inflation whatsoever.

Section C retired Members have a uprating of whatever the lowest of RPI or 5% ...

[RobertT]

Section C retired Members have a uprating of whatever the lowest of RPI or 5% ...

Yes I forgot the difference between Sections A/B and C.
Although if you joined the pension scheme before April 1997 and are in section C, some of it will be GMP(guaranteed minimum pension) due to being contracted out of SERPS and that part of your 'pension in payment' does go up by CPI rather than RPI.

[dnorman1]

Many thanks for all the help. I retire in five or six weeks time after about fifteen years service. My reasoning on this was that if the pension was not linked in any way to inflation, then it would have made sense to take the lump sum and invest it, albeit at a very low rate of interest. However, seeing as this is not the case, I'll probably leave it in and just take a small regular income. Thanks once again.

[easter bunny]

Just remember the lump sum is Tax Free but your monthly Pension is not ( after your Tax Allowance is taken into account )

[dnorman1]

Yes good point, maybe I'll give it a bit more thought. Thanks once again.