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CPI pension link puts block on transfer values

Public sector workers are currently unable to get a transfer value for their pension following the Government’s decision to link their pensions to the Consumer Prices Index.

Chancellor George Osborne announced in the Budget that the uprating applied to public sector pensions was changing from the Retail Prices Index to CPI but the implementation date has not yet been confirmed.

A note on the civil service website states: “We are awaiting guidance from Treasury on how to apply CPI. Until then, we will not be able to provide members with cash equivalent transfer value statements as these are affected by the uprating mechanism.”

The Treasury confirmed the delay was affecting all public sector schemes but says guidance should be published within three months. A spokesman says: “The Treasury needs to provide guidance on how to calculate the transfer value. We are working to do it and expect it to be completed within three months.”

AJ Bell marketing director Billy MacKay says: “With uncertainty around jobs in the public sector, it is likely large numbers of people will be considering their pension options so any transfer delay is bound to cause problems. For people who want to transfer, long delays could have a financial impact in terms of time out of the market.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Why would anyone want to transfer out of a Public Sector Pension (yes I know that on occassions people will occassionally be better off transferring but very occassionally) – a bit of a non story really.

  2. i was in the army for 13 yrs. just left and now im going to cetv to release my pension early. why you ask? because rip off britian is to expensive to live in, can you honestly see it getting any better in years to come? so im going to buy a new build house in europe for less than what i will get from my pension, and semi-retire at 40, no mortage, no debt!!!! im a self employed medical professional, so i can locum back in the uk every now and then to keep the pennies coming in. goodbye britain, good luck!!!

  3. Sean – not a non-story at all – some of us are watching this anxiously.
    We moved to Spain 7 years ago – my husband continues to work in the public sector given our original expectation of him retiring at 50. Now it will 55 and the goal posts keep on moving. So we want out, and right now we are tied by the freeze, with no way of knowing how badly the final calculation change will affect all our careful and prudent planning

  4. some of us aretrying to get divorced and need these CETV’s for that purpose, so Sean its not about transferring out the pension scheme but more transferring out of a marriage

  5. I am trying to transfer previous occupational pensions into the Civil Service scheme and also in the throes of a divorce for which I need to know the CETV of my pension.

    Does anyone know of a web-site I can monitor to find out when the freeze has been lifted? I know that there is a very long queue of enquiries ahead of mine, so it will probably be a considerable time after the freeze has been lifted before I hear any news from the Civil Service pensions department.

  6. The delay in providind CETVs in the context of divorce is a real issue, see my blog – link below
    http://www.spenceandpartners.co.uk/archives/actuaries-spence-partners-warns-on-divorce-log-jam-over-proposed-pension-changes/

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