Loss of pension—personal injury claims

The following PI & Clinical Negligence practice note provides comprehensive and up to date legal information covering:

  • Loss of pension—personal injury claims
  • Scheme types
  • What is the loss?
  • Are ill health pensions deductible?
  • Before planned retirement date
  • After planned retirement date
  • The impact of Ogden 8
  • Use of 2018-based projections
  • Contingencies other than mortality
  • Addition of further tables
  • More...

Loss of pension—personal injury claims

NOTE: On 15 July 2019, at the conclusion of the first review of the discount rate, the Lord Chancellor announced that the discount rate would change to minus 0.25%. The minus 0.25% discount rate came into effect on 5 August 2019. Schedule A1 to the Damages Act 1996 provides that subsequent reviews are to take place within five years of the conclusion of the previous review which means that the next review must commence on or before 15 July 2024.

In cases in which the claimant is an employee and there is a claim for future loss of earnings, there is likely also to be a claim for loss of pension. For reasons set out below, a claim for loss of pension is less likely to be available to a self-employed claimant.

See also Practice Note: Claims for loss of entitlement to state pension in personal injury claims.

Scheme types

In order to calculate this loss, the first step is to establish the nature of the pension scheme to which the claimant belongs. There are two principal types:

  1. final salary or defined benefit schemes, in which the pension is a fraction of the final salary multiplied by the number of years of service (typically 1/80 for each year of service up to a maximum of 40)

  2. money purchase or defined contribution schemes, where the

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