CPI inflation rate for September announced.

[Al R]

T'was static from last month at 2.7%.. many were expecting a small drop, so George won't be happy. This is the figure which determines the rise of the next financial year's military pension payment. However, the retail prices index (RPI) measure of inflation fell slightly to 3.2% from 3.3% in August. It means prices are still rising faster than your final salary pension and most wages, which rose by 1.1% on average over the same period. The public sector of course, is on a wage freeze (excepting incremental changes which are set in contract).

[Onceapilot]

Hmmmmm, yes, RPI. I think that was in a contract once?:mad:
Cheers Al, reminds me that we (I?) have not heard much about the future Service pension decisions? Do you know the date of that bombshell?:uhoh:

OAP

[Al R]

.. wasn't that written in law.. which was changed?! Probably easier to do that than directly crowbar an entire employment contract. Which is still what happened; albeit in a slightly more judicial manner. I think most changes have been announced; which ones did you have in mind?

The Tories announced yesterday that the personal allowance is going to rise to 12.5k too. If they get in..

[Party Animal]

Al R,


The public sector of course, is on a wage freeze


Not quite. The public sector was on a pay freeze for 2 years (according to the govt), which was actually 2 years and 364 days (i.e, 3 years by any non-coalition viewpoint). We then received a 1% pay rise on 1st April this year with the promise of a 1% pay rise next April.

Clearly, this is lagging inflation by some margin but not 'technically' a pay freeze.

[Al R]

PA,

Thanks for the reminder, of course there was - I was in mind freeze.

[dctyke]

Talking of the 'public sector' it has gone very,very quiet on the MP's double digit pay rise............................:rolleyes:

[Melchett01]

Clearly, this is lagging inflation by some margin but not 'technically' a pay freeze

Party Animal, I think the technical word you are looking for is 'cut' :hmm:

[Just This Once...]

Just encourages people to leave. I've no idea how much further they want to reduce us but I guess when the exodus becomes politically untenable they will turn the funding tap back on. The thing that grates is having the AFPRB applying the veneer of independence.

[Al R]

JTO

You might find this interesting then.

http://alasdairmsmith.********.co.uk/2013/04/the-story-of-my-departure-from-afprb.html

(Insert bl0gspot - substituting a o for the 0, or google "chairman afprb pushed blog")

[Party Animal]

Melchett,

But at least your morale can remain high along with a deep inner feeling of contentment knowing that "we're all in this together!" :mad:

[Melchett01]

Party Animal ... :mad:

My morale was disbanded on the grounds of affordability and that it could be cut as part of the HERRICK-dividend. I have submitted a UOR for an increase to my sense of humour levels, just waiting to hear the outcome :ok:

[TorqueOfTheDevil]

Dear Melchett,

We are sorry to inform you that, due to continuing budgetary constraints, we are unable to approve the UOR for a mid-life upgrade for your sense of humour. In fact, it will be necessary to take a capability holiday and make do without any sense of humour for the foreseeable future. Please rest assured that this will have no impact on Defence output and we are engaging with the French to provide this capability in future. You will be pleased to hear that we are also considering a Seedcorn initiative with the Germans.

Yours etc etc...:yuk:

[Pontius Navigator]

I think you should work hard to get elected as a police commissioner. Of course it helps if you have a big mouth and a K.

Incidentally, how is HE getting on or is that a loaded question?

[Melchett01]

The Tories announced yesterday that the personal allowance is going to rise to 12.5k too. If they get in..

Just spotted you posted that little gem Al. Did they happen to mention what level they would be bringing the higher rate threshold down to in order to compensate for this largesse? Clearly, the average man on the street is only in work to generate tax revenue for the Government, so there's no way they are going to actually do something that might leave us with some money for discretionary spending at the end of the month.

And by discretionary spending, I mean food, fuel etc because that's the state it's getting to with the eye-wateringly punitive levels of taxation we are now paying in one form or another.

[Al R]

We talk of people not saving, there being a pension crisis and we worry about the take up of auto enrolment. So raising the tax threshold is going to cure some symptoms and make some people happy, but it won't address the underlying malaise. I agree with you, the better earning at home are hacked off with being treated as cash cows. Looking at this bottom up, the whole taxation system is bewildering, expensive, indecipharable and out of control. It needs a thorough overhaul - not constant tinkering around the edges so that political party ‘A’ might look more appealing over political party ‘B’ by eeking out a few votes. We need to have a party in authority that places the national needs first, not aspirations to win votes.. and that is why we get these rolling goalposts.

I know someone who has left Uni and who can't get a job using his (brilliant) degree. He has three non jobs (yes, there are plenty of them around) which he juggles just to get a full working week under his belt. Because of this, he only pays a small amount of tax, but no NI so is not building any credits for his future state pension. What we really need is to get the poorest in society into a self-sustaining position so that they may afford to live today before we can even think of forcing them to save for the future and so that we aren't seen as cash cows who are always being exploited in order to pay for the pensions of a few politicians and control obsessed careerists.

We have national and multinational corporations effectively being subsidised by the taxpayer. These companies employ many service wives, on a part-time, minimum wage basis which forces them into the position of claiming tax credits, whch we also know are being reduced. These employers then use complex tax-avoidance schemes to negate Corporation tax so effectively the UK taxpayer is subsidising its own workforce through this indecipherable churning of money around and around the system. I saw yesterday that Ireland is closing the door on Apple.

I am no idealist (any more) but I find it wrong that shareholders in these companies earn money when both the taxpayer and those company employees are being so obviously exploited. Sad that he aspires to be in a position whereby he can pay tax and NI but cannot get adequate hours as it's too expensive for the employers. It is for reasons such as that, that the likes of you and me and many others reading PPRuNe are treated as they are, ie; as cash cows. Who is going to pay for the future?

The soundbite of £12,500 before tax sounds good and it allows some of us to feel a little better about things, safe in the knowledge that our wonderful leaders and politicians are looking after us. And I have no issues with that in itself, I think that we do need to raise the level for lots of reasons. But in the context of what larger picture? This is just a sticking plaster and as you say, there will be a payback. Food banks are growing at a collosal rate and energy prices are going to start going through the roof.. is this an acceptable price to pay for some of us having a little more money at the front end and oblivious to it being plundered later from our back pockets?

The policies of the past couple of decades have brought us to our knees and we are living life at the end of a financial elastic band. As you say, we have taxes but let's not forget, we also have taxes wrapped up as 'fees' etc. It's dreadful.

[SOSL]

Virgin Balloon Flights www.virginballoonflights.co.uk - YouTube (http://www.youtube.com/watch?feature=player_detailpage&v=Z39RCJJvU7E)

Rgds SOS

[reds & greens]

Interesting information; may I pose a question based on the OP's input (and the fact that Apr 14 will be my first pension change) - does this mean that my pension will increase by 2.7%? Y or N

[Al R]

Y (if it is not a deferred/preserved pension and if you are aged 55 etc). If you are younger than aged 55, then you won't see an increase - it will be stored up for you until the time when you will be. If though, you are 55+ and on (for example) '75 and you requested max commutation, you could see a very nice increase. Although it doesn't mean that your net income will increase by that amount though as the additional (quite noticably?) larger payment may well have altered your tax position. Commutation pays you cash today rather than tomorrow, but the damned state takes it back.

At age 55, the accumulated rate of indexed inflation is applied to the full pension amount i.e the pension you would have received without any possible commutation. The difference you would have experienced up until the age of 55 is between the commutation/reduced pension and no commutation/full pension is because they are effectively loaning you the pension early (as a commutation lump sum).

On another note, the index linking measure changed a couple of years back from RPI to CPI. CPI usually runs at a lower rate than RPI so that means that pension increases will be lower. Although it is true that you keep your rights to the pension rules in force when you leave the scheme, when it comes to pension increase measures, your pension payment increases iaw The Pension (Increases) Act and that ties increases in with the increase measure adopted for State Benefits. So the annual increases you were storing up until the age of 55 will be CPI. Humph. :*

[reds & greens]

AL R
An extremely helpful, comprehensive and anticipated answer, many thanks.
I retired at age 55 in Apr just gone on AFPS05.

[Willard Whyte]

Just a quickie, having been forcibly retired since Sep '12 and taken full commutation I'm expecting a 1.0(CPI)ˆ9 increase in the pre-commutated annual pension after I reach 55; i.e. no pension rise for a few years yet.

Anyhoo, is my understanding correct that September's CPI is applied the following April, regardless of the month one retired in?

After the way my ('75) pension calculation was screwed up at first I intend to be fully prepared come 2021.

Ta.

[dctyke]

Is it not the case that it is the average cpi for the whole year which happens to be calculated after the sept result? If it was just the sept figure surely those honest souls in government would ensure sept was a low inflation month.

[Pontius Navigator]

tyke,

The 2.7% in September is the annual rate since 1 Oct 12; it is not a spot rate for one month.

Naturally Government would not dare to manipulate costs in the one month would they :).

No, what happens is that a cost of living item in Sep 12 will be compared with the same item in Sep 13 (for simplicity). Say fuel prices have gone up by 3% between the two dates. Then that 3% item will feed through to the 13/14 index.

But, supposing there was a drop in fuel prices in Sep 13 by 1% say, tax deferred, oil cheaper etc, that only 2% would feed through.

Now "SSE will increase gas and electricity prices next month by 8.2pc" so you will be clobbered by an immediate 8.2% price rise but won't get a 2.7% pensions increase until 6-7 months later. That 8.2% will of course work through to Sep 14.

Of course the weighting in the index might change.

Government manipulation? No of course not, they are as honest as the day is long. I must get on with my painting before the light fades.

[langleybaston]

I think you should work hard to get elected as a police commissioner. Of course it helps if you have a big mouth and a K.

Incidentally, how is HE getting on or is that a loaded question?

Haven't heard from Clive of India either.

[Pontius Navigator]

Looking at the appropriate website Sir C appears to be very snug . . .