Whilst I think I know a fair bit in general about pensions, I’m not so sure about the GMP element of a DB scheme. However, I’m sure we have that knowledge on here ?
I have been in receipt of my Lloyds Bank pension for 4 years, I am 65 in September an get my state pension at 66. I currently receive an annual RPI increase on my whole pension each April.
However, my pension doc says this with Regard to GMP
On or after my birthday in September 2022 (age 65) the scheme will pay increases on the GMP built up after the 5th April 1988 of £1954.68 in line with price inflation up to 3% or CPI which ever is lower. No increases will be paid on GMP built up before April 6th 1988.
I am not sure what this means, does this mean that £1954.68 of my pension will no longer be raised by RPI MAX 5% but by CPI MAX 3% ?
Having dealt with a couple of GMP examples for friends. They have received increases in pension at 65, where backed dated annual increases to GMP is applied on their 65th birthday. Should I expect an increase in my pension due to this ?
GMP was the contracted out section (SERPS) of a workplace pension, usually finally salary.
This was stopped in April 1997. Pension schemes have to pay increases each year from April 1998 of CPI or maximum of 3%, so it should go up but yes it is capped at 3%.
I assume you aren't yet receiving the GMP element, so I read it that you will at 65 and it will be indexed at that maximum of 3% of CPI id lower.
I have a recollection that there was something about the increase being paid through the state pension.....
ROB7LEE, Sometimes the more you find out the more confused you get. I was under the impression I was already receiving the GMP element of my pension. However, your comment above, reading the link, and other pieces makes me question my thinking. I am now thinking the GMP £1954.68 will only come into payment on my 65th Birthday. An any increases in the GMP will be applied via my state pension and not my Lloyds pension.
if that’s true…. Then it’s a pleasant surprise to think I will get a £1954.68 rise in pension from September, possibly more if it’s been increased by indexation.
Hopefully Golfie may be able to shed further light on this. Thanks very much for your help.
No sorry, Don't think I can be of any help. DB Schemes & GMP not really my area of expertise.
However, the new state pension done away with all the add-ons & extras that people had been contracted to and in that link that @Rob7Lee posted it explains that there will be winners & losers to the new State Pension. It seems like you @ralphmilne maybe one of the losers and the GMP increase that would have usually been paid by the Government is no more - although the 3% increase to your £1954 GMP will be superseded by the triple lock guarantee, which will increase that State Pension by 8%+ over the next tax year.
If you qualify for a GMP, it will be paid from your 60th birthday if you are woman, or your 65th birthday if you are a man. In this respect it is not affected by increases in the state pension age.
If you qualify for a GMP, it will be paid from your 60th birthday if you are woman, or your 65th birthday if you are a man. In this respect it is not affected by increases in the state pension age.
Whilst I think I know a fair bit in general about pensions, I’m not so sure about the GMP element of a DB scheme. However, I’m sure we have that knowledge on here ?
I have been in receipt of my Lloyds Bank pension for 4 years, I am 65 in September an get my state pension at 66. I currently receive an annual RPI increase on my whole pension each April.
However, my pension doc says this with Regard to GMP
On or after my birthday in September 2022 (age 65) the scheme will pay increases on the GMP built up after the 5th April 1988 of £1954.68 in line with price inflation up to 3% or CPI which ever is lower. No increases will be paid on GMP built up before April 6th 1988.
I am not sure what this means, does this mean that £1954.68 of my pension will no longer be raised by RPI MAX 5% but by CPI MAX 3% ?
Having dealt with a couple of GMP examples for friends. They have received increases in pension at 65, where backed dated annual increases to GMP is applied on their 65th birthday. Should I expect an increase in my pension due to this ?
Hope somebody can help. Thanks
Phone Lloyds Pension dept, that's what they are there for. I think it may be administered by Equiniti?
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
A decent month for stock markets. A surprise for Summer. Still a long way to go to recover the losses this year, alongside challenging economic conditions.
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
I'm with you, and could list several other worries, such as, recessions are bad for earnings, but the FTSE has an annoying habit of drifting upwards in the Christmas holiday simply because everyone in the City is on holiday.
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
A decent month for stock markets. A surprise for Summer. Still a long way to go to recover the losses this year, alongside challenging economic conditions.
Yes my pension that I transferred to Vanguard in late June is looking rather healthy for July.
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
What about China are you concerned about?
the fact they're deploying tanks to stop people going on a bank run, that one of their largest property developers defaulted at the beginning of the year and their property market is stalling. Something really dodgy is going on.
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
What about China are you concerned about?
the fact they're deploying tanks to stop people going on a bank run, that one of their largest property developers defaulted at the beginning of the year and their property market is stalling. Something really dodgy is going on.
Listening/watching a couple of investment forums this week it seems there is a split on China. Some think that they have now got a grip on Covid & their GDP numbers should look healthy this year. Others think the tanks are because they are gearing up for an invasion of Taiwan.
Consensus is that the US is technically in recession & is not the place to invest. More looking at Emerging Markets & the UK. Avoid Europe.
Can't believe I'm the fifth most pessimistic of the group. I sincerely hope (most of) you are right but I'm very worried about China and a Euro crisis. Hopefully that's just my confirmation bias ****ing with me.
What about China are you concerned about?
the fact they're deploying tanks to stop people going on a bank run, that one of their largest property developers defaulted at the beginning of the year and their property market is stalling. Something really dodgy is going on.
Thanks @kentaddick, this is what I'm concerned about. They are also using the health app to stop deposit holders travelling to protest that they can't get to their money. Construction industry suppliers are defaulting on mortgage payments because property companies aren't settling their bills (and not just Evergrande).
China unravelling has been a long time coming. Massive misallocation of capital from central planning on a scale never seen before. And I think it will come in a big bang as they have the ability to control information and market behaviours for a long time before they can't contain it. Together with their Zero Covid policy, lots of people are unhappy with the government right now, which is a good excuse for a war to distract them. There are all sorts of rumours that there's a move to oust Xi before he is confirmed life-time leader in October.
As for the European banking market - that was never cleaned up, unlike here and in the States and so many of their banks are technically insolvent. The reason it's never been cleaned up is the merry go round with government debt. Rising interest rates will blow that right open. The Euro is already struggling to retain parity with the dollar. That could be very ugly all by itself.
Comments
I have been in receipt of my Lloyds Bank pension for 4 years, I am 65 in September an get my state pension at 66. I currently receive an annual RPI increase on my whole pension each April.
However, my pension doc says this with Regard to GMP
On or after my birthday in September 2022 (age 65) the scheme will pay increases on the GMP built up after the 5th April 1988 of £1954.68 in line with price inflation up to 3% or CPI which ever is lower. No increases will be paid on GMP built up before April 6th 1988.
I am not sure what this means, does this mean that £1954.68 of my pension will no longer be raised by RPI MAX 5% but by CPI MAX 3% ?
Having dealt with a couple of GMP examples for friends. They have received increases in pension at 65, where backed dated annual increases to GMP is applied on their 65th birthday. Should I expect an increase in my pension due to this ?
Hope somebody can help. Thanks
GMP was the contracted out section (SERPS) of a workplace pension, usually finally salary.
This was stopped in April 1997. Pension schemes have to pay increases each year from April 1998 of CPI or maximum of 3%, so it should go up but yes it is capped at 3%.
I assume you aren't yet receiving the GMP element, so I read it that you will at 65 and it will be indexed at that maximum of 3% of CPI id lower.
I have a recollection that there was something about the increase being paid through the state pension.....
This may help
https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/guaranteed-minimum-pension-gmp-and-the-effect-of-the-new-state-pension
if that’s true…. Then it’s a pleasant surprise to think I will get a £1954.68 rise in pension from September, possibly more if it’s been increased by indexation.
Hopefully Golfie may be able to shed further light on this. Thanks very much for your help.
However, the new state pension done away with all the add-ons & extras that people had been contracted to and in that link that @Rob7Lee posted it explains that there will be winners & losers to the new State Pension. It seems like you @ralphmilne maybe one of the losers and the GMP increase that would have usually been paid by the Government is no more - although the 3% increase to your £1954 GMP will be superseded by the triple lock guarantee, which will increase that State Pension by 8%+ over the next tax year.
https://www.unbiased.co.uk/life/pensions-retirement/guaranteed-minimum-pension-GMP
Here you go;
When will I get my GMP?
If you qualify for a GMP, it will be paid from your 60th birthday if you are woman, or your 65th birthday if you are a man. In this respect it is not affected by increases in the state pension age.
I charge less than Golfie, just 0.5%
Consensus is that the US is technically in recession & is not the place to invest. More looking at Emerging Markets & the UK. Avoid Europe.
China unravelling has been a long time coming. Massive misallocation of capital from central planning on a scale never seen before. And I think it will come in a big bang as they have the ability to control information and market behaviours for a long time before they can't contain it. Together with their Zero Covid policy, lots of people are unhappy with the government right now, which is a good excuse for a war to distract them. There are all sorts of rumours that there's a move to oust Xi before he is confirmed life-time leader in October.
As for the European banking market - that was never cleaned up, unlike here and in the States and so many of their banks are technically insolvent. The reason it's never been cleaned up is the merry go round with government debt. Rising interest rates will blow that right open. The Euro is already struggling to retain parity with the dollar. That could be very ugly all by itself.