|
< back to news stories
Private Pensions Could be Reduced for 12 Million People
30/12/2010

It has recently been announced in the National Press that the Government is expecting to link private pensions to the consumer price index (CPI) instead of the Retail Price Index (RPI). The CPI is a measure of inflation that takes into account the RPI minus house inflation. Currently RPI is at 4.5% whilst CPI is 3.2%. This means that pensions will be worth a significantly smaller amount in the future.
Currently a person who receives a pension worth £10,000 a year can expect it to be worth £23,079 a year in 20 years' time.
With the introduction of CPI, this pension pot will be worth £18,193 a year in 20 years time.
Over the 20-year period, a loss of nearly £40,000 will be incurred which may force many pensioners to make drastic changes to their standards of living. Pensions expert Ros Altmann has warned the move will lead to lower pensions across the board.
Homeowners aged over 55 years who are concerned about the governments proposals and would like to know how much money the value of their property could release to help make up their expected shortfall in retirement income, can find out by contacting therightequityrelease.co.uk for equity release advice.
|