It's interesting, is it not, that it is only the 'BASIC' state pension which is increased by max of 2.5%, salary inflation, or RPI (oops, CPI - not so funny). So, is it not the case that all that SERPS we paid for is now dead in the water? Governments - trust them not. Serps was a rip off.
Rise up ye ancients? :-)
GOG
In message , GOG writes
Too bloody late! They are in, and they are looking after their own kind.
SERPS was not a rip-off, it adds about 65% to my State pension, and other people I know get more than that. However, Alistair Darling started this wheeze when he applied a pension increase to only the basic pension last time.
It is a serious sneaky trick, but I'm glad it has not gone totally unnoticed.
No it isn't, and never was, not compared to contracting out anyway. SERPS (or S2P as it now is) rises in line with earnings between accrual and pension age, then rises in line with RPI (maybe CPI in the future). It is generally thought better than contracting out for older workers (eg 45+).
The previous government planned to flat-rate it by freezing the upper accrual point (but not the upper earnings limit). That is a rip-off in the sense that they are taking earnings related contributions but moving towards flat rate benefits - but that's the way NI has been going for years. I doubt this will change with the new government.
You do keep coming out with this utter drivel. Try moving on from the
1970's, there's no longer the same divide in politics. Who is "their own kind" then, eh? The budget clearly hit higher earners harder than lower earners, in fact some low earners will probably be better off even with the VAT increase, due to the tax threshold increase and CTC increases.In message , Andy Pandy writes
It didn't rise in line with RPI, CPI or anything else in Darling's last budget, and I've seen nothing to say that it will ever increase again. If this is the case, then it is being allowed to wither.
Maybe you have to be on the receiving end to notice. :-(
No the basic state pension still uses RPI, not CPI, in this new "triple lock".
See
-- brightside S9
Mmmmh, That's not quite how I read it, although you are correct about the rise in April 2011, about which I was not aware. When I say "Dead in the water", I mean that its value will decrease year by year until it is worth nothing. A good dose of inflation should hasten that process.
----------------------------------------------------------------------------------------------- Pension increases and prices From April 2011 the government will use the Consumer Price Index (CPI) as the measure of prices.
This will change how much public sector pensions and benefits like the basic State Pension will increase each year.
The CPI and the Retail Price Index (RPI) are used by government and economists to work out how much prices increase each year. The CPI is usually lower than RPI.
The basic State Pension will increase by at least the equivalent of RPI in April 2011 to make sure its value is at least as generous as under previous rules.
----------------------------------------------------------------------------------------------------
GOG
The legislation says it rises with RPI in payment. RPI was negative (Sept figures are used for April rises). So it didn't rise.
In message , Andy Pandy writes
The new legislation will say CPI, as I understand it.
For one year only, April 2011. Read the tricky bits below:
State Pension From April 2011, there will be a ?triple guarantee? so the basic State Pension will rise by either:
earnings ? the average increase in UK wages that year prices ? how much the cost of living increases that year
2.5 per cent The basic State Pension will rise each year by whichever gives the highest amount.From April 2011 the government will use the Consumer Price Index (CPI) as the measure of prices.
The CPI and the Retail Price Index (RPI) are used by government and economists to work out how much prices increase each year. The CPI is usually lower than RPI.
The basic State Pension will increase by at least the equivalent of RPI in April 2011 to make sure its value is at least as generous as under previous rules.
**************************
Yes. And if the last lot had done that, you'd have seen a rise in your SERPS this April (the CPI was positive in Sept).
What are you on? It'll increase at least in line with CPI, which is basically inflation without housing costs (rent/mortages etc). Pensioners tend to either own their house outright or get housing benefit to pay their rent, so housing costs are far less relevant to them.
In message , Andy Pandy writes
That depends whether they intend to index the SERPS portion. As I already pointed out, it was not indexed in April this year in darling's last budget.
What are the chances that Osbourne will decide to restore the indexing next year, by which time there will be even worse cuts announced?
Of course they do. They intend to index it by CPI. It's in the budget report.
Did you want a cut then? If they'd have indexed it by RPI it would have been cut. But there is probably no provision in the rules to cut it if RPI is negative.
WTF are you on about? The indexing doesn't need to be "restored" because it was never removed. Are you incapable of understanding the concept that if inflation is negative then indexing doesn't result in a rise?
In message of Wed, 23 Jun 2010, Gordon H writes
It did increase! in line with RPI as at the previous Sept i.e. Zero - RPI for Sept 09 was -1.4% so rather than reduce it by 1.4% it remained the same whilst basic pension increased by 2.5%, so basically we gained even though RPI was in a negative situation.
DF
In message of Fri, 25 Jun 2010, Gordon H writes
Yes it was. Up till now indexation of pensions has been based on the previous September RPI
Basic Pension increased by the greater of RPI (-1.4%) or 2.5%. Other elements (including SERPS) increased by the greater of RPI (-1.4%) or ZERO.
Darling's last budget had nothing to do with it - he left it unchanged.
For the future: Basic Pension increases by the greater of 2.5%, Earnings or CPI (except for next April it will be RPI) Other elements will increase by CPI
The April increases are based on the previous September indexes.
DF
In message , David Floyd writes
It didn't in April this year, SERPS was frozen, making my effective total increase only about 1.5%.
I'll be watching, but it's a long time off.. :-)
In message , David Floyd writes
(RE SERPS)
I am repeating myself I'm afraid, but SERPS did NOT increase in April this year, it was frozen. I hope that others are correct in saying that it will be increased in the future.
Exactly. The trouble is most people are too stupid to see this as probably the biggest real-terms rise in state pensions for a long time. Basic state pension up by inflation plus 3.9% and SERPS up by inflation plus 1.4% (approx)!! When did that last happen?
The 2.5% minimum for the basic state pension was introduced following the "peanuts" headline in the Sun after the state pension only went about 1% or thereabouts, because inflation was only 1% that year. This really shows the last govt pandering to journalist and electorate stupidity - if inflation is 1% then a 1% rise in the pension is no better or worse than a 5% rise when inflation is 5% !!
"Gordon H" wrote
Oh yes it DID! The greater of
*negative* 1.4% or Zero is, err, well, *zero*."Gordon H" wrote
Exactly! So what David wrote above (and others have told you as well) is CORRECT!
Have you not been reading what people have been saying? What rise did you expect?
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