A couple of pedantic queries, of no practical importance, into the arcane mysteries of the old style State Pension.
1. I received the DWP leaflet today about the weekly increase to my State Pension (Old style) for 2019-20.
I understand how all the figures are worked out and the accompanying leaflet states a 2.6% increase (Triple Lock) to Basic SP along with a 2.4% increase (CPI) to relevant components of Additional State Pension.
The thing is, the BSP for 2018 was £125.95pw and a 2.6% increase to this figure gives £129.22 to two decimal places, whereas the DWP figure given for next tax year is £129.20pw - representing an increase of 2.58%. Why this small discrepancy?
Is the actual figure used for the triple lock 2.58% but it is quoted as 2.6%? Or does the DWP hold the figures for BSP calculation to more than two decimal places but quote them to two places on yearly statements?
OTOH, checking with the quoted figure of 2.4% for CSI increases gives exact (to two decimal places) agreement with the DWP figures quoted for GRB and for Pre 97 additional State Pension.
2. Speaking of the Graduated Retirement Benefit (GRB), it suddenly occurred to me today to wonder what happened to this on the change to the New SP. Was the average GRB incorporated directly into the total figure for the new flat rate pension as part of the average Additional State Pension figure? Is an individual's GRP calculated and used along with SERPS etc. figures to calculate the individual pension of somebody retiring now? - the transitional arrangement.
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Boring question about the SP
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- Lemon Half
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Re: Boring question about the SP
XFool wrote:2. Speaking of the Graduated Retirement Benefit (GRB), it suddenly occurred to me today to wonder what happened to this on the change to the New SP. ... Is an individual's GRP calculated and used along with SERPS etc. figures to calculate the individual pension of somebody retiring now? - the transitional arrangement.
Yes.
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- Lemon Half
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Re: Boring question about the SP
Regarding the adjustment for inflation, it is probable that the DWP work to the nearest 5p for the weekly basic state pension.. However the rest of the indexation certainly does not. In my case there are several elements to my state pension, including Graduated Pension and two sorts of SERP. They also used to use RPI and CPI for different parts.
TJH
TJH
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Re: Boring question about the SP
tjh290633 wrote:Regarding the adjustment for inflation, it is probable that the DWP work to the nearest 5p for the weekly basic state pension.. However the rest of the indexation certainly does not.
I think you're right. I've checked this every year back to 2013 and all the given figures for Basic SP end in zero or five. And yet, as you imply, all the additional figures seem to be worked out to two decimal places. Strange.
So there are still things to learn about the SP!
Thanks TJH.
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- Lemon Slice
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Re: Boring question about the SP
Each benefit has an individual rounding convention for how new rates are calculated. The majority of new rates are rounded to the nearest 5p. This includes, for example, the standard (full) rates of Category A and Category B basic State Pension and the full rate of new State Pension.
Others are raised by CPI without rounding.
Some juicy details here in the explanatory notes to the increases legislation
https://www.legislation.gov.uk/ukdsi/2018/9780111164327/pdfs/ukdsiem_9780111164327_en.pdf
Others are raised by CPI without rounding.
Some juicy details here in the explanatory notes to the increases legislation
https://www.legislation.gov.uk/ukdsi/2018/9780111164327/pdfs/ukdsiem_9780111164327_en.pdf
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