RPI to CPI calculator

[Lou1z]

i've placed another calculator up. This one will show you the amount of money you lose over a period of time due to the switch from RPI to CPI.
i've not put any error checking in at the moment so it's a little raw.

have a shot of it here:
http://www.uk-fire.net/pension1/rpitocpi.htm


figures to play about with are below. have a look at it at 20 years after retirement & then 30 years (if you live that long). you will be shocked!

December figures were:
RPI = 4.8%
CPI = 4.2%

Current Firefighters Salary
£28,199

Pensionable salary
40/60ths would be £18799 (not taking any commutation)
40/60ths would be £14099 (taking 25% commutation)

[Lou1z]

i've upped the years in this to 45 for those of us that will live that long!
so that would be 95 years old if you go at 50. the figures are mind boggling!
run them 5 years apart to see. i'm going to try and get a graph in there so you can see the effect.

[Lou1z]

As you can clearly see in the above example, the RPI to CPI change doesn't make much difference to you in the first 5 years of retirement.
live a bit longer though and you start to see the difference.

The above graph is based on an annual pension of £15k and on December 2011 figures of RPI @ 4.8% & CPI @ 4.2% .
As you can see...... at 30 years into it, there is nearly a £10k difference in the last year alone in what you would receive.

The cumulative amount (the amount per year lost added together) in the above example comes to £93,084.60

[Lou1z]

the table below shows what your pension will be worth if you retire on £15k (after commutation)
it's based on an average of 2011's RPI & CPI figures which were 5.2% & 4.4% respectively (0.8% difference)
if that difference was to remain the same, the table shows you what you stand to lose.

The difference column is the difference each year with the total amount of money being lost over the years being added together in the bottom red cell.
those already inretirement will be starting to see this happen already



the above is with an 0.8% difference. the government expect this to widen to 1.4% albeit the overall rate will reduce.

[Lou1z]

you'll even be getting shafted on your death bed!

[PEGASUS]

you'll even be getting shafted on your death bed!

Plus the fact I woudn't be surprised if the money grabbing barstewards put something into place so that we are unable to receive the state pension at 67/68, because we have the fire service pension!

[big smoothie]

Industrial action anyone........

I'll be voting for industrial action........

[Koko]

Whatever happened to the appeal ?? I've heard nothing :mad:

[Lou1z]

it was a few days after the last time. i'd expect to hear before the weekend.

[Lou1z]

LATEST 20/3/12 - Pension switch challenge is lost by unions

There were protests outside the High Court when the case was initially heard

Trade unions have lost an appeal against a change in the way public sector pensions are protected against inflation.
The High Court ruled in December that the government's switch in calculations was lawful.
Trade unions had complained about how the Consumer Prices Index (CPI) was replacing the faster-rising Retail Prices Index (RPI) to uprate pensions.
Now they have lost the latest stage of their challenge at the Court of Appeal.
This confirms a reduction in the value of future annual pension increases for millions of public sector pensioners.
The policy also saves the government billions of pounds in the coming years and is a major area of disagreement within the public sector pensions dispute.

Calculations
CPI and RPI are measures of inflation - or the cost of living - based on the prices of baskets of goods and services. The RPI basket includes mortgage interest payments and some other housing costs, and is generally higher owing to the formula used to calculate it.
The use of CPI for inflation-proofing pensions was first applied in April last year.
It saw pensioners in schemes covering civil servants, teachers, NHS employees, local government and others, receiving an increase of 3.1% instead of 4.6%.
At the original court challenge in December, the trade unions' lawyers had argued that, in making the change, the government had acted beyond its powers granted by the Social Security Administration Act.
Judges found unanimously in favour of the government in three of four counts, and by a majority of 2-1 on a fourth. The Court of Appeal has now upheld this decision.
Two groups, mainly consisting of unions, launched the legal action. The Fire Brigades Union, NASUWT, Prison Officers Association, Public and Commercial Services union, Unison and Unite make up one group, while the other consists of Prospect, the FDA, GMB, Police Federation, National Association of Retired Police Officers and the Civil Service Pensioners' Alliance.
The judges agreed to allow the National Union of Teachers, Association of Principal Fire Officers and National Federation of Occupational Pensioners to join the challenge.