Soaring inflation, energy bills and prices means that many retired members of staff are already struggling in the worst cost of living crisis in a generation. Whilst the government has said that a typical household energy bill will be capped at £2,500 annually until 2024, that belies the fact that energy costs have increased substantially over the last few months.
Lloyds introduced a one-off additional cost of living payment for all staff in grades A-G, although that was pro-rated for reduced hours members of staff. Following our campaign in TSB all staff got the same cost of living increase regardless of hours worked. Retired members of staff, many of whom live on small pensions, have been given no support whatsoever. That needs to be rectified quickly. Charlie Nunn, the Group Chief Executive said:
“Like our customers, we know our colleagues are facing an increase in their cost of living. That’s why we announced a one-off additional payment to support our colleagues and we will continue to listen and consider what else we can do in response to the rising cost of living”.
Lloyds retired members need help too.
Pension scheme members get increases on the 1st April each year, in line with inflation up to a maximum of 5%. The inflation figure used is taken from the previous year. The exact date depends on the scheme rules. Inflation has been above 5% since September last year and it’s likely to stay above 5% well into 2024. The Trustee has made discretionary awards to pension scheme members during periods of high inflation in the past and there is no reason why it can’t do that again. We will be writing to Mr Harry Baines, Chairman of the Trustee asking him to implement discretionary payments immediately. We’ll also be writing to pensioner members in the next few weeks asking them to write to Mr Baines urging him to take action.
RPI Challenge Loses In High Court
Up to 10.4 million pensioners will lose out after the High Court rejected a judicial review of the government’s decision to replace the retail price index (RPI) measure of inflation with the consumer price index including housing (CPIH). The case was brought by the Trustees of the BT, Ford and Marks and Spencer pension schemes. Members will recall that the Trustee of the Lloyds pension schemes refused to take part in the legal action.
The significance of that shift is that historically RPI is higher than CPIH. The latest inflation figures for August 2022 show that CPIH was 8.7% but RPI was 12.3%.
In his judgement, Justice Holgate said that: “About 10.5 million people in the UK have private sector DB pension, a majority of which are linked to the RPI. It is said that they will receive reduced payments amounting to 4-9% of their lifetime benefits. On average women are expected to experience a greater reduction because of their longer lifespan.”
In his judgement, Justice Holgate rejected the Trustees’ claim on two grounds. He said the court had found that the UK Statistical Authority (UKSA) had the power to align the CPIH and RPI and that parliament placed no restrictions on its ability to do so when it was set up. Equally, parliament had not required the UKSA to weigh up “winners and losers” when coming to its decisions. It was only “concerned with promoting and safeguarding the quality of official statistics.
The Trustees of the three pension schemes are deciding their next steps and haven’t ruled out an appeal.
Members with any questions should contact the Union’s Advice Team on 01234 262868 (choose Option 1).