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Old 30th Sep 2011, 20:41
  #52 (permalink)  
LFFC
 
Join Date: Jun 2005
Location: UK
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There are a lot of factors to consider and most depend on your personal circumstances. However, here are a couple of important ones:

With a pay freeze in force, your pension will only increase by your yearly pay increment - if you have any left; if not, your pension is frozen as well.
The last time I looked, the yearly increment was about 3% of basic salary (although it varies a bit). As inflation is running at about 4.5%, your pension will be losing value in real terms if you stay in. Anyone who reached their maximum pension scale 18 months ago and remained serving will have suffered nearly a 10% decrease in the real value of their pension by Apr 2013!

However, your pension becomes index-linked from the day you leave the Service. The next pension increase will be applied in Apr next year and will be based on the CPI rate announced next month. If you were to leave the Service today (with 6 months of the FY yet to run) then you would receive a pension increase of half of the CPI figure.

So on the face of it, if you've decide to leave soon, it would be best to get your hands on your pension as soon as you can. However, you might wait for a big pay rise in Apr 2013 (hence a big increase in pension), or you might gamble that inflation will fall below your yearly pay increment of about 3% soon and make it worthwhile staying in. But don't hold your breath..........
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