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Pensions and the Armed Forces - RPI to CPI

F

FOMz

Warrant Officer
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And the first picture in the article.................... is of american soldiers - well done BBC. :pDT_Xtremez_25:

Now you can point the finger of blame where you want at the financial crisis, but the fact remains, the Government DOES NOT WANT to help and has no interest in even thinking about helping - Plain and simple.

The Millionare land owner Chancellor Osbourne, is a grade A tit and its good to see the Defence Minister standing up for us as well............

As I said - no interest in even wanting to help.
 
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M

Mug?

Flight Sergeant
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not really

not really

RAF_Nurse! said:
Anyone seen this little gem? :

http://www.bbc.co.uk/news/business-11726501



All I can say is......"Oh......my.....god"! Its a disaster for those of us who have made a full career out of the Services.
Click to expand...

More of a disaster for those leaving at 22. if you leave at 55 you only have a few years of CPI to worry about.
If you went at 22 and never bothered with another pension, stocking shelves at tesco's knowing your pension would be pilling up. They need to worry.

Going to be even worse for those on 05 leaving at the 18 yr point. 25 years of CPI instead of RPI.

To be honest (may have been done before by the way as not a recent change) if house prices stay stagnent it may not have as big an effect. Who knows!
 
busby1971

busby1971

Super Moderator
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There's been plenty on here about it.

There's been plenty on here about it.

Basically ignore the pounds and pence as they sound big compared to todays values, basically if there is 1% difference between CPI and RPI on average (which is very conservative compared to what has happened over the past many years) if you leave at 40 your pension will be worth 75% of what it would have been if it had been linked to RPI at the age of 65.

All pensions that are underwritten by the superanuation bill are being hit unless they expressly define RPI in their constitution.

Some people on here don't see it as a problem.
 
T

True Blue Jack

Warrant Officer
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This topic was discussed at length on this thread

The change affects the entire public sector (including MPs presumably) and the figures quoted by some sites are wildly speculative given that they are trying to predict the cumulative difference between CPI and RPI over the next 25 years.

Historically, CPI has usually been lower than RPI, therefore the money in our pockets in later years will undoubtedly be less than it might have been. However, this change has been pretty much inevitable since the previous government made CPI its preferred method for measuring inflation and it is worth remembering that our pay rises - and those of most of the country's workforce - have been determined by CPI for several years. If everybody's pension increases are also determined by the same rate of inflation then the relative spending power of the pay or pension in our pocket will remain constant, irrespective of its absolute monetary value.
 
M

Mug?

Flight Sergeant
1,347
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?

?

busby1971 said:
All pensions that are underwritten by the superanuation bill are being hit unless they expressly define RPI in their constitution.

Some people on here don't see it as a problem.
Click to expand...

Hang on though. All the stuff that came with the 05 offer stated RPI. Yet they do not take that into account.
A lot of people, including the IFA I saw used figures based on this for predictions to help make the choice.

I know there was some noise made by the pension people.
 
R

RAF_Nurse!

LAC
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Mug? said:
Hang on though. All the stuff that came with the 05 offer stated RPI. Yet they do not take that into account.
A lot of people, including the IFA I saw used figures based on this for predictions to help make the choice.

I know there was some noise made by the pension people.
Click to expand...


This is part of my point. The article states that they can get away with it because of wider public interest.
 
R

Realist78

Master of my destiny
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Mug? said:
Hang on though. All the stuff that came with the 05 offer stated RPI. Yet they do not take that into account.
A lot of people, including the IFA I saw used figures based on this for predictions to help make the choice.

I know there was some noise made by the pension people.[/QUOTE]

Not enough noise apparently. Although they have ridden roughshod over what was in black and white in the AFPS 05 booklet (it's still there), would that have really swung anyone's decision to switch?
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W

Witty_Banter

Flight Sergeant
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Do I stay or do I go now......

Do I stay or do I go now......

Ok, so could someone with a bit of pension knowledge translate all this for me? If someone is on AFPS05, and they are half way through a 22 year contract, is it worth staying on to 22? Or beyond? Or is it now of more benefit to make it to the 12 year mark and get out with the 9k resettlement?

It's been a loooong day and I can't really think straight enough for facts and figures at the moment!
 
S

Snagsy

LAC
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Witty_Banter said:
Ok, so could someone with a bit of pension knowledge translate all this for me? If someone is on AFPS05, and they are half way through a 22 year contract, is it worth staying on to 22? Or beyond? Or is it now of more benefit to make it to the 12 year mark and get out with the 9k resettlement?

It's been a loooong day and I can't really think straight enough for facts and figures at the moment!
Click to expand...

Erm, it really does depend on more than a few things....

This news is basically saying that you won't get AS MUCH of a pension as you would have done, because it goes up every year based on a lower number than previously set. Its still a good pension.

As for whether you should leave at 12 and get the 9k (actually its just over 10k, called resettlement grant, use the pension calculator).... well that really does depend on what you plan on doing when you leave doesn't it!
 
W

Witty_Banter

Flight Sergeant
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Yep, having just re-read the whole thread for the third time, my brain has finally engaged and I know what you're talking about. Cheers for that!
 
R

Realist78

Master of my destiny
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Witty_Banter said:
Ok, so could someone with a bit of pension knowledge translate all this for me? If someone is on AFPS05, and they are half way through a 22 year contract, is it worth staying on to 22? Or beyond? Or is it now of more benefit to make it to the 12 year mark and get out with the 9k resettlement?

It's been a loooong day and I can't really think straight enough for facts and figures at the moment!
Click to expand...

The benefits of the AFPS 05 only really become apparent if you're in for the long term. Think about it, they don't bring in a new pension scheme to increase benefits for all, as ever, cost savings will have been the driver IMO.
 
M

Mug?

Flight Sergeant
1,347
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whatever

whatever

Realist78 said:
The benefits of the AFPS 05 only really become apparent if you're in for the long term. Think about it, they don't bring in a new pension scheme to increase benefits for all, as ever, cost savings will have been the driver IMO.
Click to expand...

Not really wanting to stray off topic but a lot of people fell into the " wont be as good " decision making trap.
There was a lot more to it at the time.
4x death benefits (3 on 75) although all seem to have been increased since.
2 lump sums
Options to split pension/ keep it out of the hands of ex wives etc.
Early departure options, and final salary based rather than rank based.
(a 7 yr High band SGT will get more than a standard SGT pension)
No requirement to do 2 yrs in rank to earn pension, it is based on your pay.

A lot has changed since. you get the pension for the rank you hold when killed in action now on 75 be even if acting for a week.
Everyone is on the high band now ( so it seems)
The RPI will have a big dent in those who planned for the second lump sum as that will not increase by such a big percentage now. If it was £30k even 1 % lower CPI over 25 years will make a huge difference(age 40-65)
 
T

True Blue Jack

Warrant Officer
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Mug? said:
The RPI will have a big dent in those who planned for the second lump sum as that will not increase by such a big percentage now. If it was £30k even 1 % lower CPI over 25 years will make a huge difference(age 40-65)
Click to expand...

I'm prepared to be corrected on this but I didn't think the second lump sum was linked to either index?
 
busby1971

busby1971

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Not arguing with TBJ

Not arguing with TBJ

All the guides and pam said RPI this and RPI that, unfortunately the rules that are behind the glossys just linked it to the governments prefered rate at which benefits ( I think S2P mainly) go up, which is now the CPI.

This change has happened but we are not being told about it so we are not being aware that we need to make extra provision for later on.

Pay rised are linked to CPI to make them cheaper, not to make them more realistic, real inflation for most people runs higher than either CPI or RPI but when you are working you can better yourself and get more pay that way.

TBJ perhaps you're not the best person to defend a change to which you have displayed a great deal of ignorace of.
 
R

Realist78

Master of my destiny
5,522
0
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Mug? said:
Not really wanting to stray off topic but a lot of people fell into the " wont be as good " decision making trap.
There was a lot more to it at the time.
4x death benefits (3 on 75) although all seem to have been increased since.
2 lump sums
Options to split pension/ keep it out of the hands of ex wives etc.
Early departure options, and final salary based rather than rank based.
(a 7 yr High band SGT will get more than a standard SGT pension)
No requirement to do 2 yrs in rank to earn pension, it is based on your pay.

A lot has changed since. you get the pension for the rank you hold when killed in action now on 75 be even if acting for a week.
Everyone is on the high band now ( so it seems)
The RPI will have a big dent in those who planned for the second lump sum as that will not increase by such a big percentage now. If it was £30k even 1 % lower CPI over 25 years will make a huge difference(age 40-65)
Click to expand...

Notwithstanding all of the above (and a lot of it is good), it is really only a benefit over AFPS 75 if you are doing the long stretch, hence why I switched.
 
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