If you are a Police Officer considering retirement, the chances are you were born in the 60’s, a period of great prospects and prosperity. So what are your prospects now as you face retirement in a period of austerity and uncertainty? Surprisingly bright if our existing retired Police Clients are anything to go by!
As Police Retirement is our specialism, we at Police Money Matters (PMM) want to share with you the journey into Retirement.
The “Swinging Sixties” was a great period of change and prosperity in modern world history and many of our retiring police officer clients were born in the Sixties. The increased birth rates in the 60’s make this now retiring baby boomer generation, as a group, the wealthiest, most active and physically fit generation there has ever been.
I imagine you would like that to be the prospect as you move into the next phase of life – retirement! Here at PMM, we share that goal and our aim too is for you to live long and prosper! So for the moment, let’s move on from the 60’s and let’s look at another theme of numbers – the PMM 30’s! In PMM language; the number thirty is very significant when it comes to the Police Pension Scheme (PPS) 1987 and maintaining prosperity throughout Police Retirement. Please allow me to explain:-
You work (and contribute) for 30 years, and would naturally expect to benefit for 30 years at least. For the majority of retiring police officers, that’s the objective isn’t it?
Can that happen? Well, I know that it’s possible for anything to happen, and when it comes to longevity there are no guarantees for any of us! However, the Government Actuarial Department (GAD) works on probability based on historic trends. The GAD current estimate for paying out a Police Pension for a 50-year old police officer retiring now is around the 30 year mark! I know that for many, who have a low expectancy of how long retired Police Officers live, that statistic will blow away some myths. So, whether you have enjoyed the past thirty years or otherwise, there’s definitely hope of an enjoyable retirement after Police work!
Here is another 30-year fact. The 1987 PPS is Index-Linked, which quite simply means that it is protected against inflation or if you prefer, it is Inflation-Proofed. However, your pension was recently switched from the Retail Price Index (RPI) to the Consumer Price Index (CPI). The question is, which Index is more Inflation-Proof, the RPI or the CPI? It might shock you to learn that in the past 30 years, the CPI (the current PPS 1987 index) trailed the RPI by 50%.
What’s the significance? Well of course, we are not able to predict the future, and financial regulations don’t allow us to predict things like investment growth figures, bank interest rates or the like, looking at past history and market trends. So, if the next 30-year trend of RPI vs CPI was to repeat itself, the recent switch in the index would mean that your future standard of living could be affected. Although it is important to note, that past performance is not indicative of future performance
“What can I do about it?” I hear you ask. I believe you might well find the answer in the following group of “30’s”