BBC Pension Increases
On 19th January 2022 the inflation figures for December 2021 were announced by the Office for National Statistics. The Retail Prices Index (RPI) rose to 7.5% (up from 7.1% in November 2021); the Consumer Prices Index (CPI) rose to 5.4% (up from 5.1% in November 2021) and CPIH rose to 4.8% (up from 4.6% in November 2021).
Under the Rules of the BBC Pension Scheme pension increases are based on the December RPI and CPI figures with the increases taking effect from the following 1 April. The guaranteed increases are:
Old Benefits : 10% or the rise in the RPI, if less
New Benefits : 5% or the rise in the RPI, if less
CAB 2006 : 2.5% or the rise in the RPI, if less
CAB 2011 : 4% or the rise in the CPI, if less
This year inflation has been within the guaranteed increase provided for under the Rules of the Scheme for Old Benefits members, but has exceeded the guaranteed increases for New Benefits, CAB 2006 and CAB 2011 members. Therefore, Old Benefits members are likely to receive a pension increase of 7.5% next April, whilst New Benefits members are likely to receive 5%. For CAB 2006 members the increase is likely to be 2.5% and for CAB 2011 members it is likely to be 4%. No increase will be awarded on any previous pension exchanged for a higher, level pension under the Pension Increase Exchange (PIE) exercise.
When the rise in the RPI/CPI is greater than the guarantee the BBC may ask the Trustees to award a discretionary increase. However, in view of the current exceptionally high inflation, the deficit in the pension scheme and the proposed changes to the licence fee, a discretionary increase seems unlikely.
The BBC and Trustees will consider the increase to be awarded in April although the result may not be known until late March when it will be published on the BBC My Pension website at: https://www.bbc.com/mypension/pensioners/
The State Pension is normally increased by the ‘triple lock’ which is the highest of earnings growth, price inflation (CPI) or a 2.5% minimum guarantee. However, this year the link to earnings has been suspended.
The September inflation figure (on which the State Pension increase is based) was 3.1% and so the State Pension will increase in line with the CPI of 3.1% next April. This means that the new flat rate State Pension will increase to £141.85 per week and the full rate of new State Pension will increase to £185.15.
The Government confirmed on 25 November 2020 that the RPI will be aligned with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) from February 2030. The change will see RPI continue to be published as an index but bring the methods and data of CPIH into RPI.