oap

[luco1110]

read in a daily paper to day
old age pension is going to be cut by £15
feom next april
anyone one heard of it

[Old_Geezer]

What paper ?

Oh, no I haven't. Sounds unlikely.

[bednobs]

no

[luco1110]

daily mirror

[bednobs]

http://www.mirror.co....unds-115875-23515102/
is this the story?

[Old_Geezer]

http://www.mirror.co....unds-115875-23515102/

Oh I did hear some discussions about swapping from RPI to CPI, but not taken much notice of it.

[Old_Geezer]

Typical

[Old_Geezer]

Well bear in mind the attempt at the next election.

[craft1948]

My private pension has changed from RPI to CPI (they have to follow the governments policy). My union said I'd be no worse off.............

[hc4361]

OAPs are getting a big rise next April.

http://www.guardian.c...tate-pension-benefits

[Old_Geezer]

One wonders, if you are to be no worse off, why they are so keen to make a change.

Seems to me folk should be made to stick to whatever is first agreed, but in practice it seems if those with power want to change something the small folk have to put up with it.

Well hope it all wiorks out in the end.

[notasyoungasiwas]

Could somebody explain what RPI and CPI are please - thanks.

[hc4361]

RPI is the Retail Price Index, taken from the cost of a basket of groceries and compared with the previous year as a per centage.

CPI is the Consumer Prices Index, the cost of goods and services. Very similar to RPI then but the calculations are very different.

The CPI takes the calculation as an average of the lowest prices over the previous 12 months, whereas the RPI is calculated as an average of the average prices over the previous 12 months.

[ladybirder]

And one includes mortgage costs and the other doesn't. Not sure but think RPI does.

[hc4361]

As I understand it the increase would be 15% less than under the existing system.
So, for ease of calculation if the pensioner is currently receiving £100 pw and the RPI is 5%, in April the pension would be £105.

Under CPI it would be £104.25, but of course that doesn't make great headlines.

[boxtops]

That makes it look not so awful, hc.

If they start messing with it, I'll start claiming mine. I've deferred it at the moment, while I'm still working.

[twix123]

This story relates to the indices used to calculate the uplift in future pensions of public sector workers not the State pension that we are all entitled to.

[hc4361]

Thanks for that. Pity the Mirror couldn't be as straightforward rather than scaremongering.

[New Judge]

Twix is quite right. The court case referred to brought by the public sector unions is disputing the government’s decision to increase state sector occupational pensions by the lower CPI instead of RPI. The percentage losses alleged are cumulative over a number of years.

The Coalition promised to upgrade the State pension by either the increase in average earnings, or RPI or CPI, whichever is the greatest of the three. Their handling of the economy has seen the annual increase in RPI rise to 5.6% last month (upon which next April’s State pension increase will be based) and CPI to 5.2%. Faced with this, there is now talk that such an increase might be seen as “unfair” on workers (many of whom have seen no increase in their pay). So they are considering using an average of the last twelve months RPI figures because they consider the September figure to “unrepresentative”.

Of course this would be perfectly OK if a similar arrangement had been made on the numerous occasions in the past when a particularly low September figure was produced and it was considered “unrepresentative” of the otherwise high inflation figures of the rest of the year.

But strangely, it wasn’t.

[notasyoungasiwas]

Thank you hc - you've explained it very clearly for me. I always get confused by what the papers say !