It won't be a reduced pension. It will still increase by inflation or 2.5%, whichever is higher, and it will also be 'reviewed' occasionally to keep within a certain % of average earnings.
This is what it should have always been.
Let's say you want to target it at 35% of average UK earnings, and inflation means it's suddenly at 38%. Then, in subsequent years, you can allow that increase to cool down as wages catch up until it's back at 35%. If we get a period of high wage growth and it falls below 35%, then you can start increasing it more until, once again, it's at 35%.
This is what a lot of countries do. It's what Australia does.
The main difference is that it stops the double increase that happens here at the moment, where the pension would get the benefit of both the inflationary increase and then the wage increase.
---------- Post added at 17:51 ---------- Previous post was at 17:46 ----------
Quote:
Originally Posted by Carth
I wouldn't mind a reduced pension IF I could find a nice little part time job to make it up . . like old folk used to. Now we're screwed because of the National Minimum Wage . . which means it's cheaper to employ someone aged between 16 & 20 instead.
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