PENSION INCREASE 2011


 

The rise in the Retail Price Index from January 2010 to January 2011 was 5.1%. It is expected that this increase will be applied to most British Steel pension payments from April onwards except for that part covered by the Guaranteed Minimum Pension (GMP). Because the latter is part of the State pension arrangements increases are based on the September inflation figures and are now calculated on the Consumer Price Index (CPI) rather than the Retail Price Index (RPI).  CPI increase in September 2010 was 3.1% and this will be applied to the GMP portion of your pension.

 

The general increase for members of the acquisition section of the scheme will be limited to 5% in accordance with the rules and the increase in any pension earned by service after 31st March 2006 will be limited to 4%.

 

The basic state pension (“Old Age Pension”) will be increased by 4.6%, which was the increase in RPI last September, but all other components of the state scheme will be increased only by the September CPI figure (3.1%).  In future years the basic state pension will be subject to the “Triple lock”, i.e. it will increase in line with average earnings, CPI, or 2.5%, whichever is the greater.  Other state benefits will be linked to CPI only.

 

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