To: Secretaries of Constituent Organisations 23rd June 2010
EMERGENCY BUDGET 2010
The Emergency Budget took place yesterday. Some of the major provisions are laid out below.
Indexation of Public Service Pensions
From April 2011, the indexation of public service pensions will be
switched from the retail prices index (
The PSPC views this change of indexation as unacceptable. The
Coalition Government had stated that accrued rights would be protected. The
PSPC expected that this would include continued indexation, via the 1971
Pensions (Increase) Act, to
Basic state pension
As expected, the Chancellor announced the restoration of the
earnings link for the basic state pension from April 2011, with a ‘triple
guarantee’ that the basic state pension is raised by the higher of earnings,
prices or 2.5 per cent. The ‘prices’ element will be
Age-related personal allowances
While there was an announcement that the basic personal allowance would be raised from £6,475 to £7,475 in the 2011-12 tax year, there was no announced increase in the age-related personal allowances.
Concessions linked to state pension age
The Government has confirmed that the age at which these benefits can be claimed (such as Winter Fuel Payments, free off-peak local bus travel, eye tests and prescriptions) will rise in line with the female state pension age, which is set to increase from 60 to 65 over the next decade.
Increase in state pension age
The Government has announced a review of the implementation date for when the state pension age will rise to 66. Under current arrangements, the state pension age is set to rise to 66 between 2024 and 2026. The PSPC of course opposes an increase in the state pension age.
Annuitisation of Savings
The Government has confirmed that it will end the existing rules that create an effective obligation to purchase an annuity by age 75 from April 2011.