• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Chapter 5, Solution 5.2

S

shinmo

Member
“Pension schemes increase retirement income in real terms in order to maintain standard of living”.
1) To maintain living standard, pension schemes should maintain retirement income in real terms, rather than increase?
 
Yes, I see what you mean; the retirement income definitely needs to increase in nominal terms, but why not just remain constant in real terms?

That would all be fine unless the cost of living increased at a rate other than that of retail prices. The cost of care in retirement is likely to increase at a rate greater than price inflation, so an increasing income will be needed to match it.
 
You must log in or register to reply here.
Back
Top