Loss of Pension Contributions
Nathan
Member
I am working on a case whereby we are trying to work out a clients loss of pension contributions owing to an accident.
Working out what the pension contributions might be worth at a particular age is okay, I am trying to work out whether or not we need to apply inflation or not?
I am told that we should only apply it one way, i.e. on the way in or working back but I am thinking, regardless of what inflation is, the pension pot at the end will still be worth the same. (I have assumed that the pension contributions keep pace with inflation by maintaining the value.)
I am thinking that that should be the only inclusion for inflation?
e.g.
£100 for two years with a growth rate of 4% = £212.16 if you were to compensate that value now using the same assumed growth rate I believe would be £196.15.
Any thoughts?
Working out what the pension contributions might be worth at a particular age is okay, I am trying to work out whether or not we need to apply inflation or not?
I am told that we should only apply it one way, i.e. on the way in or working back but I am thinking, regardless of what inflation is, the pension pot at the end will still be worth the same. (I have assumed that the pension contributions keep pace with inflation by maintaining the value.)
I am thinking that that should be the only inclusion for inflation?
e.g.
£100 for two years with a growth rate of 4% = £212.16 if you were to compensate that value now using the same assumed growth rate I believe would be £196.15.
Any thoughts?