At a stroke in June the Tory led Government wiped thousands of pounds from diligent savers’ retirement incomes, now the impact on individuals becomes clear – an average public sector pensioner will lose more than two pounds a week as a result of the budget
It has emerged today that on average £117 will be cut from the pensions of 3.5 million retired public service workers who spent their lives providing front-line services due to changes announces in the June emergency Budget. The Tory led government announced that pension increases for pensions in payment will from April 2011 be indexed to the Consumer Price Index (CPI) rather than the Retail Price Index(RPI) for the previous September.
The CPI increase in September 2010 is 3.1% which is 1.3% lower than RPI increase of 4.6%, This will be the index that is used to uprate all public sector pensions in payment and many in the private sector that do not have other explicit provision when these are uprated in April 2011.
Brian Strutton GMB National Secretary for Public Services said: “The government’s use of CPIfor pensions indexation instead of RPIwill take 1.3% from pensioners at the very time food and clothing prices are rising and VAT is about to soar, this equates to a £117 cut.
At a stroke in June George Osbourne wiped thousands of pounds from diligent savers’ retirement incomes, now the impact on individuals becomes clear – an average public sector pensioner will lose more than two pounds a week as a result of the budget. This change will have a major impact over time as forecasts from the Office for Budget Responsibilty show CPI rising by 13.7% between 2010 and 2015 and RPI rising by 22.1% in the same period.
This is another example of a choice made by government that hits the poorest hardest today and causes increased tax bills tomorrow as more pensioners fall onto means tested benefits. This isn’t part of a structured plan to reduce the deficit, this one element of an ill-conceived legislative programme of random cuts.”