BUDGET: Benefits to be linked to CPI
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The Chancellor has revealed that benefits, tax credits and public sector pensions will rise in line with the consumer price index rather than the retail price index in order to avoid an outright freeze.
George Osborne said the move does not apply to the state pension or to pension credit.
He said the changes would bring about £6bn of savings in this Parliament and that they represent a fairer way to save money than freezing all benefits.
But the Chancellor said that child benefits would be frozen for the next three years and revealed that limits will be introduced on housing benefits.
Housing benefits will be restricted to a £280 maximum benefit on one bedroom properties and a £400 maximum on four bedroom or larger properties.
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Readers' comments (1)
Richard Brown, Managing Director, Moneynotion Limi | 22 Jun 2010 3:19 pm
All well and good, but private sector pensions are not usually indexed. Annuitants have the choice of electing to take a lower pension to have indexation.
Public sector pensions should be the same for future service (past service is contractual and can't be changed).
The effect of this is that public servants have a better pension provision paid for by industry and commerce, which industry and commerce can't afford to provide for themselves.
How is that fair?
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