On 18th January 2023 the inflation figures for December 2022 were announced by the Office for National Statistics. The Retail Prices Index (RPI) rose by 13.4%; the Consumer Prices Index (CPI) rose by 10.5% and CPIH rose by 9.2%.

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 increases guaranteed under the Rules of the Scheme are:

Old benefits

New benefits

CAB 2006

CAB 2011

0%
or the rise in the RPI, if less
0%
or the rise in the RPI, if less
0%
or the rise in the RPI, if less
0%
or the rise in the CPI, if less

For Old Benefits members:

Pension increases are calculated on the notional full pension before any part of it was exchanged for a tax-free cash sum.

No increase is awarded on any previous pension that was exchanged for a higher, level pension under the Pension Increase Exchange (PIE) exercise.

This year inflation has been above the guaranteed increases provided for under the Rules of the Scheme for all sections of membership. Therefore, the guaranteed pension increases shown above would be payable.

When the rise in the RPI/CPI is greater than the guarantee the BBC may ask the Trustees to award a discretionary increase. In considering whether to award a discretionary increase, the BBC would consider, amongst other things, the actuarial deficit at the previous actuarial valuation (although this is likely to have improved over the last few months), the impact of inflation on broadcasting costs, the changes to the licence fee, and the level of salary increases for serving staff. Given all the above, it seems there will be limited scope for a discretionary increase this year.

The BBC and Trustees will consider the increase to be awarded in the next few months, 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/

State pension

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. Last year the link to earnings was suspended but has been restored for this year.

The CPI for September (on which the State Pension increase is based) rose by 10.1% and so the State Pension will increase next April in line with the CPI of 10.1%.

RPI/CPI

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.

Published On: February 16th, 2023 / 2.2 min read / Views: 632 /

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