The amount of notional income from untaken pension savings, which reduces benefits for those over state pension age, has changed.  This is because a new set of GAD tables has been issued.  These are the notional annuity rates which, together with age and pension savings amount, determine the amount taken into account as income in the benefits calculation.  This is very different to the the deemed income or tariff income calculation used for other capital.

The new tables came into force, unannounced that I have seen, in September.

The effect is somewhat puzzling.

For most of those between 66 and 72 there have been substantial increases in the amount of notional income assessed, between a 4.5% increase and 0.92%.

For those 78 or over there is a reduction in the amount of notional income assessed between about 3% and 5%.

For those between 73 and 78 there is a mix of increases and reductions, depending upon age and the 15 year gilt rate applied.  This ranges from an increase of 1.69% and a decrease of 3.81%.

At age 75, for example, a gilt rate of 2.25% will increase the notional income by 1.28%, a gilt rate of between 3% and 5.75% has no effect but a gilt rate of 6% means a decrease of 0.93%.

There’s no reason given for these changes on the GAD page but the effect will be to lower benefit for those under 73 and increase it for those over 80. For those in between it will depend upon what is the gilt rate on the day that they are assessed.