HC Deb 09 May 1978 vol 949 cc450-3W
Mr. Cope

asked the Minister for the Civil Service if he will set out in the Official Report the real value at the end of each year since retirement, as a percentage of original pension, of the Civil Service pension payable to a civil servant who retired on a pension of £1,000 a year on 31st December 1965 and of civil servants who retired on equivalent pensions at the end of each year since then.

Mr. Charles R. Morris

The information is given in the following table:

REAL VALUE OF PENSION IN MONTH INDICATED AS PERCENTAGE OF ITS VALUE AT TIME OF RETIREMENT
Date of Retirement December 1966 December 1967 December 1968 December 1969 December 1970 December 1971 December 1972 December 1973 December 1974 December 1975 December 1976 December 1977
31st December—
1965 … … … 96.4 93.7 88.9 88.3 81.8 95.2 97.2 96.1 93.9 94.9 93.8 98.4
1966 … … … — 97.1 92.1 89.8 83.2 96.3 98.4 97.2 95.1 96.0 94.9 99.6
1967 … … … — — 94.9 90.6 84.0 94.8 96.7 95.6 93.5 94.4 93.3 97.9
1968 … … … — — — 95.5 88.6 95.8 97.8 96.7 94.6 95.5 94.4 99.1
1969 … … … — — — — 92.7 96.9 98.9 97.8 95.6 96.6 95.5 100.2
1970 … … … — — — — — 97.2 99.3 98.1 95.9 96.8 95.8 100.5
1971 … … … — — — — — — 98.1 96.9 94.8 95.8 94.7 99.3
1972 … … … — — — — — — — 99.8 97.6 98.6 97.5 102.3
1973 … … … — — — — — — — — 99.1 100.1 99.0 103.9
1974 … … … — — — — — — — — — 103.5 102.4 107.4
1975 … … … — — — — — — — — — — 103.6 108.7
1976 … … … — — — — — — — — — — — 106.5
Notes:
(a) In arriving at these figures, no account has been taken of the Pensions (Increase) Act 1974. This Act adjusted the levels of pensions which began in the period of pay restraint 1973–74 and were based on artificially low levels of pay.
(b) Money values have been converted to real values using the monthly Retail Prices Index in December of each year.
(c) Before 1971 the only pension increases reflected in this table were those resulting from the Pension (Increase) Act 1969. A once-and-for-all "catching-up" increase was awarded for existing pensioners in 1971 under the Pensions (Increase) Act 1971.
(d) The increases awarded each year since 1971 were based on the rise in the Retail Prices Index over a period different from the period between the increases, thus giving short term variations in real values at a time when the rate of inflation is changing.
(e) Under the provisions of the Pensions (Increase) Act 1971 (as amended by the Superannuation Act 1972) identical percentage increases may be granted to pensions beginning at any point during a 6 month period.

Because of (d) and (e) above, the increases awarded since 1971 to public service pensions do not correspond exactly to the rise in the cost of living at the time of the increase. Thus, pensions increased in December 1977, for example, were based on the rate of inflation between June 1976 and June 1977. Reduction to a real value by use of the retail price index in December 1977, when inflation was at a lower rate, produces figures which are slightly over 100 per cent. of the original pension value. Conversely, in periods before 1976 when the rate of inflation was increasing, pension values in December of each year lagged slightly behind the rate of inflation.