Lies, damned lies and statistics...
Working out the cost of the RPI cap is, of course, impossible, since it depends on both future RPI and future pay rises. So to get some idea on how much the RPI cap will bite, I made a couple of assumptions and plugged them into a spreadsheet. Assumption 1 was an RPI of 3% (although the numbers aren't too sensitive to this one); assumption 2 was that pay rises will continue being around the RPI +.2% mark - that's the important part.
Anyway, here's what I found. If your pensionable pay today is 60K, then if the current deal didn't happen, in 25 years your pensionable pay would be just under 128K. With the RPI cap in place. then the 60K would be 122K; except that the increase in pensionable pay means your pensionable pay moves to 71.2K from April, and would then be just under 145K in 25 years.
Of course, you'll have to work an extra five years to get your pension (we're all going for Option 1, aren't we?); but using the transition funds to bump up the pensionable pay looks like it's more than offset the RPI cap. Or at least, that's what ten minutes with a spreadsheet seems to indicate. Who needs financial advisors, anyway?
