Tag: pensions

Budget 2012: Changes to Pensions, Age Related Allowances, Royal Mail Pension Plan, State Retirement Age, Pension Infrastructure Platform

As the Chancellor of the Exchequer, Rt Hon George Osborne MP announced the 2012 Budget today, I thought I’d better write a blog post with the potted highlights, although obviously for more detail you can watch his long speech, check out what’s published on the Treasury’s website (and is the main source for what is […]

As the Chancellor of the Exchequer, Rt Hon George Osborne MP announced the 2012 Budget today, I thought I’d better write a blog post with the potted highlights, although obviously for more detail you can watch his long speech, check out what’s published on the Treasury’s website (and is the main source for what is below) or have a read through the extensive media coverage.

I’ll start with pensions.

Pensions

(a) as average lifespan increases the State Pension Age will go up and

(b) the State Pension will be reformed into a single tier pension for those not currently in receipt of a State Pension but not until the next Parliament (at least 2015).

The latter means such changes don’t affect those currently in receipt of a pension, or those receiving one before the changes come into effect.

Age Related Allowances change affecting those of pensionable age

These allowances affect income tax calculations for pensioners. This will be £10,500 and £10,600 for 2012-2013, with changes in future years from 2013 onwards.

A Pension Infrastructure Platform will be set up to allow pension funds to invest in UK infrastructure.

The Royal Mail Pension Plan is being transferred to the public sector, assuming the government gets approval.

There will be reform of public sector pensions and the age at which you can retire will be increased to bring it in line with increases in State Retirement Age. This and other reforms will have to be agreed with the public sector unions.

The deficit in the Royal Mail pension scheme will be addressed if the government gets State Aid approval. The government will (if they get approval) sell off the non-gilt assets of the pension scheme and take on board the liabilities.

Strikes Update – 30th November 2011

Well today is N30 (30th November), the only union I’m in (National Union of Journalists) isn’t on strike else how would people hear about what’s going on through the media?

Yet, in a roundabout way the strikes do affect me. As a funeral organist, I can only play at funerals if the dead can be buried. However the cemetery/crematorium run by Wirral Council is closed so nobody can be buried today.

I really don’t mind as there was a funeral yesterday and one tomorrow. The colder it gets the more people die. It’s good to have a day off once in a while so I can deal with pending matters.

What the strikes have done is bring the issue of public sector pension reform to the top of the media agenda. Over two years ago, I asked the then Chair of the Pensions Committee (which controls the Merseyside Pension Fund) what will be the cost of the extra pension contributions to Wirral Council in this financial year (2009/10), due to a drop in Pension Fund Assets?. She gave a comprehensive answer which sadly isn’t in the minutes, but from my recollection she didn’t know what the increased cost to Wirral Council would be ahead of the tri-annual revaluation of the Fund.

In the last two years the answer given seems to be that the increased costs should fall on employers and employees. If you increase pension costs for employees it is in effect a cut in their take home pay. Any public sector worker working earning £21,000 a year or more has already had a pay freeze, so with the cost of living rising, no wonder they are going on strike!

Update: I passed Arrowe Park Hospital and saw a lot of union flags and a picket line there (sadly my camera battery died so no photos). The M53 was very slow between the Moreton Spur and Bidston due to the closure of the Mersey Tunnels. It’s down to one lane as you approach junction 1 as you’re not allowed to go past junction 1 due to either roadworks or the tunnel closure.