News
Changing Private Pensions Increases From RPI To CPI May Be Fraught With Difficulties
13 August 2010
Having already settled on using the Consumer Price Index (CPI) as the measure of inflation to be used to in setting future increases in the basic state pension (as part of the new "triple guarantee"), the Government also announced on 8 July its intention to use CPI rather than the Retail Price Index (RPI) in relation to occupational pension schemes.
Detail of the change is set out in a DWP statement here.
This week concerns about this change escalated, with pensions experts pointing out that the rules of many pension schemes are written in such away that moving away from RPI is not straightforward, since the measure is specifically referenced in the rules. Others claim that the change is so significant that a full consultation is required. Philip Read, the chairman of British Coal pension trustees, said retrospective legislation could breach the human rights of pensioners who have been promised increases linked to RPI and would be a "nightmare".
More on this opposition to the Government's plans can be found on the BBC website here.