“Your pay-rise is a pension rise”


I often “wake up to money” but not to this! In a discussion about when we last got a pay-rise, one listener mailed in that her boss told her

“your pay-rise is a pension rise”

It’s the first time I’ve heard of an employee being told that their pay-rise is in pension contributions and it woke me up good and proper.

third world matters 2

There are two worlds of pensions, those who are just getting by and those who worry about things like CPI and RPI – GMP equalisation and the like.


Those two worlds crossed for me yesterday afternoon when I answered a question on twitter which I shouldn’t have

To me – powers to enforce contributions are all about individuals missing out when due money from employers (or Government) on auto-enrolment. They aren’t getting their promised pay. So I answered the question.

How I wished I hadn’t! I had imposed on an argument about DB funding between Mike (the Bazooka) Otsuka and John (Ralfebot) Ralfe on DB funding!




Because of course the one thing you don’t do is dumb down a good argument between two pensions experts by introducing things so mundane as auto-enrolment.

John was keen to deliver the coup de grace

Screenshot 2019-07-17 at 06.02.58

There are two worlds out there! There is the world of 30% + contributions going into USS and other well funded DB schemes and there is the world where a pay rise is a pension rise from 2 to 3% of AE band earnings.

Nothing could so define the difference between those two worlds as the contempt shown me for inferring that these two worlds were infact one world, that the university teacher and the contractor who cleaned the lecture theatre were equal in the eyes of God!

Third world pension problems

I sometimes wonder about the humanity of pension experts and whether they leave it behind when they go to work.

I quite often here actuaries talking between themselves using phrases like “it’s only DC” when talking of third world problems like auto-enrolment.

They consider people who survive in retirement on the meagre scraps thrown to them from the rich man’s table, as beneath their consideration.

That 40% of those eligible for pension credits don’t pick up the pay rise on offer to them, doesn’t get a mention in their Olympian discourses.

That 2m people aren’t getting the pay rise they were promised by the Government because they were put in the wrong kind of pension scheme, doesn’t worry the pension experts one jot.

But the third world matters.

We are all equal in the eyes of God and the Pensions Regulator is right to put compliance with auto-enrolment at the top of its priorities.

The days of considering workplace pensions as “only DC” should be over and it is time for the pension experts to wake up and smell the coffee.

There are millions of people in this country who are not getting the right amount paid into their pensions and they are not all in the USS DB pension plan.

If the only pay rise you get is a pension rise of 1% of your AE band earnings, you need all the care you can get.

The pensions third world matters!

third world

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to “Your pay-rise is a pension rise”

  1. Philip Persson says:

    Henry, as usual you are spot on. The future is DC, and the sooner the pensions industry start to focus on the millions who need real help with real world problems, the better.

  2. Peter Beattie says:

    What about us elderly 80 plus pensioners who are stuck in the government flawed FAS/PPF regulations that do not recognise either CPI or RPI pension protection increases or any indexing that was promised in the original DB company pension schemes. We are the most obvious pensioners not recognised by Parliament or our so called pension professionals. Surely we should have ‘first call’ for protection of our meagre 90% government offer that has been erroded by time since the last centuary and a delayed starting date of 2004?

    Peter D Beattie – Pension theft and Military Veteran

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