Index Linked Pension Increase

[Captain Radar....]

So with this year's September CPI at 2.2% pension increases will be at that figure instead of 2.5% (August's figure) or 2.7% (October's figure) if those months happened to be used instead. Makes we wonder why an average of the year's figures aren't used. A half point swing either way must make a huge difference in how much has to be paid out in future and can happen in a heartbeat. I guess it's in the chancellor's favour this year but could just as easily not have been (as in the 5.2% increase of last year). Looking at the changes over the period Oct 10 - Sep 11 for example the median would be about 4%. Boggles me mind to ponder how much money 1.2% less on everyones pension increase would save (not just in that year but over the next 20 or whatever).

Seems strange to gamble on what it might be in one month, wouldn't it make more sense to average it out?

[Jambo Jet]

It is averaged out! The September to September figure show the rise between those dates..... If the October to October figure is higher then that will mean that next year the September figure will reflect any real change that has happened in Sep or Oct and it will presumably be higher.

Some years the Sep figure may seem lower, but on others it will seem higher but over all it will average out. You have only noticed it because it seems lower than the surrounding months, on other years it will have been higher and you will not have given it the time of day

[Pontius Navigator]

Jambo, while that is true using just the one 'low' month can open up the opportunity for rigging the rise and delaying the pensions increase for 11 months.

Fuel duty increases could be delayed to October. Other industries whose product is in the basket could be persuaded to delay increases etc. Of course we would not expect a Tory chancellor to stoop so low, would we?

[Bladdered]

The 5.5% last year was very nice though............:D

[Wensleydale]

2.2% is better than nothing... and the October rise will catch us next year. I'm not bothered to be honest.

[tucumseh]

The debate may be rendered academic if, as reported the other day, Duncan-Smith is thinking about a pension freeze.

[Voxpop]

Captain Radar,

I can confirm that it is the September rate which is use for the pension increase - so 2.2%.

[Voxpop]

If it is Duncan-Smith talking, it is the state pension he would referring to. At the moment there is a triple lock mechanism for these increases. They are increased by CPI, Average Earnings Index or 2.5% whichever is greater - so for next year it would be 2.5%, unless tinkered with!

[duggymac]

BGG
having worked with RAF for 40 years am thinking pot calling kettle black !!!:

[lj101]

Duggy

...and you can assess that from your met office?