Public finances may be in a mess, but there is a huge difference between deferring payments and reducing something that has been paid for, so as to give it to someone who has not paid, such as the self-employed. It is not a universal tax, nor is it a benefit, because the losers have actually accrued the pension over almost four decades of payment.
The extra indexation not provided by the private sector was always to be paid with the state pension and this cannot be said to be an oversimplification of the matter. Is DWP now suggesting that the Limited Revaluation Premiums they received from schemes did not happen or even that the premiums paid to buy GMPs back into the state scheme were imagined? What exactly do they think these firms were paying for, and will those firms and schemes now get refunds?
A few years back, the Pensions Review required advisers to compensate clients, because they had not adequately assessed the benefits offered by GMPs when transferring. Quite right too, but will those advisers now receive a rebate for benefits the DWP says it has never provided? More worryingly, will the good guys now face another review, because they overstated the GMP benefits and members may have lost out?
Chartered Financial Planner
Anders Bayley Scott