Pensions Management exec highlights change in state pension calculator

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Pensions Management exec highlights change in state pension calculator

Thu 14th Oct 2010

The state pension delivered to Brits is poised to change in 2011 and a representative from Pensions Management has explained the consequences.

Charlie Thomas, executive director of the organisation, explained that certain parts of the state retirement provision will be calculated from the Consumer Price Index (CPI) figure instead of the Retail Price Index (RPI).

"From 2011, state pensions will continue to rise by the higher [measure] of RPI, earnings or 2.5 per cent, but the state second pension (S2P) will be linked to CPI," she explained.

Ms Thomas suggested that the amendment looks set to be permanent, if comments by pensions minister Steve Webb and secretary of state for work and pensions Iain Duncan Smith are anything to go by.

She noted that the state pension is set to break the £100-per-week barrier next year for the first time as a result of the change.

The Office for National Statistics recently announced that the RPI fell in September to 4.6 per cent.

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