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Strange increase in pension for this month's statement.

Discussion in 'Retirement' started by yodaami2, Mar 1, 2019.

  1. yodaami2

    yodaami2 Lead commenter

    I have been on same grade for last ten years. UPS3. Still on final salary scheme. My pension has been increasing by small amounts in the last few months, about 20-30 per month. But this month it's nearly £400! I don't get it. Anyone else noticed a big jump this month?
  2. rikkitar52

    rikkitar52 New commenter

  3. rikkitar52

    rikkitar52 New commenter

    That's odd far too much. Phone them up don't email takes ages to get reply.
  4. MadHatter1985

    MadHatter1985 New commenter

    Yes, I also had a big jump in my pension on my benefit statement. It's as if they've applied the inflationary increase, but I didn't think that happened until 1 April each year. Or is it just a gift from the government? Nice problem to have, I suppose!!
  5. jonnymarr

    jonnymarr New commenter

    Just checked on tps online: avergae salary B on my benefit statement has increased by quite a lot in the last month - is that what you mean? They are using 09-12 for me.
  6. richest1

    richest1 Occasional commenter

    Exactly the same for me. I retire 31 August at 60. And an increase salary b years 9 to 12 best 3 from 10 is the driver which ups the pension and lum sums. I am on the old final scheme.
  7. PeterQuint

    PeterQuint Lead commenter

    The first surprise for me with that is that your final salary pension has been increasing. Mine has been falling, due to good inflation years falling out.

    I shall check anyway, thanks for the heads up.

    EDIT - Ignore that, obviously yours is still going up, you’re still paying in to it! I’m now paying into average salary.
  8. jonnymarr

    jonnymarr New commenter

    I'm paying into average salary now too, but the final salary portion has still jumped owing to the increased salary B calculation. I get the idea of there being some big ( 5% ) inflationary years in 2009-12, but I'm still a little puzzled - surely they'd already be part of my best 3 from 10 on previous statements as they've always been there? Like yodaami2 I'm confused too.
  9. richest1

    richest1 Occasional commenter

    My figures are also going up as I am continuing to buy back added years from the old scheme, the payments for these of course end August 31.

    So has anyone discovered why the inflation figure has been added now, if thats what it is? It cannot just be in my individual case as it seems others have had an increase. I am not keen to ring them and stir up a hornets nest:D
  10. PeterQuint

    PeterQuint Lead commenter

    Right I've had a check.

    I download my statement every month after my service history is updated. This tends to happen on roughly the 10th of the month, give or take.

    So the last statement I generated on 10th February had my service from 1st Jan to 31st Jan added.
    I've just downloaded a new statement, and February hasn't been added yet, so no new service is included.

    My 60/Final Salary pension has shot up by just under £300, based it appears on an increase in my average salary of just over £1,000.

    As has been said, that's strange. But just as strange, if not more so, is the fact that my 67/Average Salary has also gone up by around £100. How is that possible? I've only been paying in to that for three years, I wouldn't have thought there'd been enough change in inflation to warrant that.

    If anyone can figure it out, please feel free. But, while you're at it, can you see what other changes are due? Will we lose this again? Keep it? Gain even more?
  11. PeterQuint

    PeterQuint Lead commenter

    Just looking at the graph here:


    Most of us have best dates as February 2009 to February 2012. It looks like there was a big drop in CPI from 5% in '08 to 1% in '09, followed by a jump from that 1% to 5% in 2012. My guess is that we've all been seeing our pensions fall over the past few years, and that's been down to that 5% to 1% drop, and that we're now seeing the reverse from when it kicked back up to 5%.

    The bad news is that it falls down to 0% over the next 3 years.

    Come on, stat heads, what's happening?

    I can't figure it out. The only good news is that the fall in inflation occurred over a few years, and the rise similarly took a few years. As we've seen our benefit statements fall for a few years I'm hoping this rise will go on for a few years into the future.
    Last edited: Mar 2, 2019
  12. MadHatter1985

    MadHatter1985 New commenter

    I didn't get a big increase in the final salary scheme -just my normal monthly upgrade as my salary increases. It was in my CARE main scheme and in the additional pension I bought that I have seen the jump. The additional pension shouldn't be going up at all at the moment, so it looks to me like an inflationary increase. If so, I can't understand why it's been applied 1 March and not 1 April.
  13. richest1

    richest1 Occasional commenter

    This is interesting. I wonder if we ring the TP staff will they be aware of this complex situation and be able to explain how it will play out in most the to come?
  14. yodaami2

    yodaami2 Lead commenter

    Yes still accruing years, not for much longer though!
    Dorsetdreams, richest1 and PeterQuint like this.
  15. Dorsetdreams

    Dorsetdreams Occasional commenter

    My 'average salary' pension has increased by £450. Nice!

    I've done quite a lot of modelling and, as I said on another post recently, I had been expecting the recent month by month falls to reverse. But my modelling has been based on whole year RPI/CPI figures and my whole year salaries, and I certainly hadn't expected such a sudden turn-around.

    Here are the historical RPI/CPI adjustments:

    Year RPI/CPI Applied From April

    2019/2020= 2.4% 2019 CPI
    2018/2019 = 3.0% 2018 CPI
    2017/2018 = 1.0% 2017 CPI
    2016/2017 = 0.0% 2016 CPI
    2015/2016 = 1.2% 2015 CPI
    2014/2015 = 2.7% 2014 CPI
    2013/2014 = 2.2% 2013 CPI
    2012/2013 = 5.2% 2012 CPI
    2011/2012 = 3.1% 2011 CPI
    2010/2011 = 0.0% 2010 RPI was -ve
    2009/2010 = 5.0% 2009 RPI

    I think that over the last year the 2009/10 5% adjustment has been 'falling off'. This had been applied to all three of our best three years, whereas the 5.2% adjustment which is coming in is only currently affecting our most recent of the three. We should continue to feel the benefit of that 5.2% for a couple of years, but the real benefit is that the 0% starts to drop off.

    Furthermore, I had a reasonable pay rise in 2009 - the freeze didn't hit until 2010. This increase is now feeding into all three of the best three years.

    Warning - my calculations and predictions could be utterly wrong.
    Last edited: Mar 2, 2019
    richest1 and PeterQuint like this.
  16. PeterQuint

    PeterQuint Lead commenter

    Many thanks, that's very much appreciated.

    A few questions. Based on your modelling (I appreciate that you're not an expert):

    1 - Are you expecting the rises to continue, or just 'levelling off?
    2 - Whichever, how long do you expect that to continue before starting to fall again?
    3 - Will that fall be large and sudden?

    The reason I ask is that I may be going anytime between summer 2021 and summer 2025.
  17. Dorsetdreams

    Dorsetdreams Occasional commenter

    I am definitely NOT an expert, and having just got back from the pub, should probably be ignored.

    I intend to take ARB in two or three years, at age 56-58, if I don't get the push before.
    All my calculations suggest that I should definitely stay in the pension scheme until then.

    However, if I was to stay teaching much longer, I would worry slightly about the 1.2% and 0% years, which will start to take effect from 2022. These low CPI figures will also combine with the static pay era: a poor combination. The rise will level off and, I think, decline. In real terms, the final salary pension value will definitely decline. The effect will not be sudden. The rise in value of the career average pension will, however, more than compensate.

    The 'bigger picture' is simple. We have 10 years of protection from the effect of sub-inflation pay rises. No more nor less. Yet we have had more than 10 years of sub-inflation pay increases. We have had relatively benign inflation recently. If we did have some awful currency collapse following Brexit, and the inevitable inflation following it, yet still no proper pay rise, we (and teachers a few years younger) might be very grateful for that protection.

    In summary, I am quite certain that the only reason to bail out of the pension scheme would be to avoid the consequence of a significant pay cut - i.e. retire or opt out within 7 years of the cut. Otherwise, stick with it.
    PeterQuint and jonnymarr like this.
  18. andyblox12

    andyblox12 New commenter

    There is some brilliant insight being outlined on this thread, and one additional piece of advice I would certainly encourage for all, especially if you are wanting to know how the inflation factoring directly affects you personally, is to approach TPS and ask them to provide you with 'a listing of your last 10 years revalued salaries'.
    It will take around 7-10days to come back to you, but it is brilliant, and sheds so much light on to this matter.
    What you'll get back is something that will look very similar to the service history you see on your statement, with a date from, date to, and your salary at that time. However, this listing provides you with a fourth column, and the figures in this fourth column are the inflation-proofed salary figures, and the ones that TPS use to generate the 'best 3 in the last 10' figure (salary B).
    Hope this helps.......
    Piranha, PeterQuint and jonnymarr like this.
  19. PeterQuint

    PeterQuint Lead commenter

    Cheers. I MAY be going in the summer of 2021, or POSSIBLY the Easter of 2022. My worry would be if if the figures dropped suddenly in March 2022 (reverse of what’s just happened).

    Of course, at the moment I’m nit guaranteeing I’ll still be kicking in September, nor that I won’t go on until 2026, but it’s nice to have the knowledge.

    Thanks again.
  20. Braindead101

    Braindead101 New commenter

    I checked my pension statement this morning, and my pension has gone up too. However, the statement says date of issue 03 Mar 19 whilst the calculated at date says 30 Apr 19, which is the date when I'll be retiring. I have just assumed they have been figuring out how much I'll be getting when I go. Interestingly, it als says on my statement that I'm no longer entitled to the in service death grant as I'm out of pensionable service...
    PeterQuint likes this.

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