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.”