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Full indexation?

Discussion in 'Retirement' started by ljr, Mar 27, 2016.

  1. ljr

    ljr New commenter

    Stupidly, for years, I have been doing my best to plan my pension. As a woman born in the 50s I have been thwarted twice by the government, who keep changing the date I can receive my state pension. Now I am 15 months away from the latest date and I would quite like to know the amount I will get, but I just don't understand the message on the TP website:
    'If you reach state pension age between 6 April 2016 and 5 December 2018, the government announced that public service schemes such as the TPS will provide full indexation on the full amount of the members pension payable for life. This includes periods which were formally indexed by the State e.g. Pre 1988 GMPs. Hence, for this group of members, all indexation (where applicable) will be provided by the TPS.'
    I have 40 years of NI contributions, does anyone understand what this means for my state pension?
     
  2. wanet

    wanet Star commenter

    The simplest solution is to get a pension statement. it will tell you that you will get the best of 2, either under the old pension system or the new one. it will be the old one.
     
    Yoda- likes this.
  3. lizziescat

    lizziescat Star commenter

    I tried to understand this a while ago (it came up on a thread on old tes I think) . I don't understand it but I think it's not about how much state pension you get but rather whether the GMP part of your pension is index linked. The best explanation is on the NAPRO. Org website (look for Guaranteed Minimum Pension and Reduction of Police Pension onReceipt of State Pension. I am assuming here that police and TP ,as public sector pensions, are subject to similar rules
     
  4. ljr

    ljr New commenter

    Thanks wanet, I did ask for a pension statement, but it was very confusing regarding the effect the opted out part of the teachers pension would have on my state pension, so I contacted TP, and they couldn't help me! Basically they said I'd have to wait and see!!!
     
  5. ljr

    ljr New commenter

    Thank you lizziescat, I will look at that website to see if it is any clearer.
     
  6. lizziescat

    lizziescat Star commenter

    If it is ,please explain it to me:confused:
     
  7. Yoda-

    Yoda- Lead commenter

    State pension. You should get as a minimum £119.30 for your 40 years NI. You may get more under the new pension. You will not get less.

    Part of your teacher pension may not be index linked in the future by teachers Pensions.

    Their web site is not very helpful!

    https://www.teacherspensions.co.uk/...irement-years/guaranteed-minimum-pension.aspx

    I suppose what they are saying is they don't know yet!

    The independent has a useful article. It's not happy reading.
    This is another change they have kept to themselves.

    http://www.independent.co.uk/money/...m-contracted-out-pension-scheme-10140198.html

    My plan is to wait until after April 2016 and then contact teacher Pensions. This is when they should update their advice.
     
  8. lindenlea

    lindenlea Star commenter

    I had no idea about this aspect of the new rules. It is so complicated but the letter quoted in the OP indicates that TP will be completely index linked. I had no idea that there was any doubt about this and found the Independent article helpful.
     
  9. Yoda-

    Yoda- Lead commenter

    The OP quote about indexation only applies for a limited time for people of normal pension age retiring between, April 2016 to 15 December 2018.

    I don't think it guarantees teacher pensions will be fully indexed in the future.
     
  10. lindenlea

    lindenlea Star commenter

    Ah there are no guarentees. Only death and taxes.:(
     
  11. Yoda-

    Yoda- Lead commenter

    I believe that any post 1988 Pension is index linked up to only 3% if you have a normal pension age after 6 December 2018. There will be a consultation this summer about the indexation issue. Prepare to be short changed again!

    Here is the rest of the article that the OP took their quote from.

    "If you reach State Pension Age after 6 December 2018,
    as there will no longer be any Additional State Pension to provide increases on the pre 1988 GMP or on the post 1988 GMP above 3% per annum, we can only confirm, at the moment, that the Teachers’ Pension Scheme will continue to be responsible for providing increases on the post 1988 GMP up to a maximum of 3%.

    The Government announced its plan to consult on how best to address the joint issues of indexation and ensuring equal payment for public service pension scheme members who reach State Pension age on or after 6 December 2018. The Government expects to launch this consultation in summer 2016 and will take into consideration the generosity of the new State Pension whilst seeking to balance cost, simplicity and fairness in any outcome."

    Oh dear!

    Main reference.

    https://www.teacherspensions.co.uk/...ril-2016-and-guaranteed-minimum-pensions.aspx
     
  12. ljr

    ljr New commenter

    Oh dear, I have tried but I really don't understand it all. It seems a case of heads they win, tails I lose! Thank you all for your input, I will make more enquiries in a few weeks, maybe things might be clearer then (they certainly can't be any less clear!)
     
  13. lindenlea

    lindenlea Star commenter

    I read the quote in your post as good news for you. All your pension will go up according to to an inflation index, currently the Consumer Prices Index, each year, thus preserving its value. At present, whatever % the CPI stands at in September is taken as the pension rise for the following April.
     
    wanet and Yoda- like this.
  14. Yoda-

    Yoda- Lead commenter

    I agree, if original poster retires before 15 Dec 2018. They should get full indexation.

    Anyone with a normal pension date after 15 Dec 2018. A 3% limit to indexation (on service after 1988). Consultation this summer on the indexation issue.
     
  15. wanet

    wanet Star commenter

    I read it the same, but was begining to think it meant something else.
     
    Yoda- likes this.

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