The new pensions minister says that private sector final salary pensions may rise by CPI in the future.
Steve Webb, the pensions minister, says that many private sector final salary pensions won’t have to increase payments to pensioners by RPI, as they currently do.
Pensions have been in the news so much recently that it’s getting hard to keep up with developments. Over the last couple of weeks the focus has been on plans to change public sector pensions. Now, it seems that the government is looking to allow employers running final salary pension schemes to increase pension payments in line with the consumer prices index (CPI), rather than the higher retail prices index (RPI) from April 2011.
The government says that public sector pensions must be reformed. What could this mean for workers?
Public sector schemes can only be changed by parliament, but the government has made no secret of the fact it wants to save money.
The government wants to cut the cost of public sector pensions and it’s asked former Labour minister John Hutton to carry out a review. There are over five million people in the public sector pensions schemes who are still working (and still making contributions, if their pension scheme requires it). So if you're in a public sector pension scheme what could change and how might it affect you?
Most of us aren’t saving enough for our retirement so why not top up your company pension scheme?
Money may not be able to buy you a happy retirement, but it will give you far more options about how you spend your time.
How much are you paying into your company pension scheme? Do you even know? Many people who join their employer’s pension scheme breathe a huge sigh of relief once they’ve done so – not least because they never have to think about pensions again. But – I’m afraid – it’s not necessarily that simple. Joining your employer’s pension scheme is definitely a great step in the right direction, but you may need to top up your pension if you started saving late or the pension scheme isn’t very generous.
