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MPs oppose pension indexation switch

The Government is facing mounting pressure over its decision to switch pension indexation from RPI to CPI after MPs, the Royal Statistical Society and a pensioner group expressed concern over the move.

Last week, Labour MP for Glasgow North West John Robertson tabled an Early Day Motion highlighting the risks of the proposal. Robertson noted that, because the retail prices index tends to be lower than the consumer prices index, the change will impact on the incomes of pensioners and other vulnerable groups. He called on Government to postpone the reform until the appropriateness of CPI as a measure of price increases borne by pensioner households can be fully evaluated.

The 13 signatories to the EDM to date include Labour MPs Anne Begg (pictured) and Dennis Skinner and Liberal Democrat Bob Russell. The Civil Service Pensioners’ Alliance has organised a conference today to oppose changes it claims will cost public and private sector pension savers £250bn over the next 40 years.

Royal Statistical Society vice president Jill Leyland says: “Statistics should be compiled with the uses to which they need to be put in mind. We believe that CPI, while acceptable for some macroeconomic purposes, does not have appropriate coverage for indexation and related purposes such as wage negotiations. Against this it is quite possible that the RPI overstates inflation.

“We would like coverage and methodology of the indices to be reviewed. While much attention has focused on the exclusion of owner occupied housing from the CPI, this is not the only issue.”

The Government has confirmed it will consult on the implementation of overriding legislation to make it easier for schemes to switch to CPI.


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  1. Why is it no one has cottoned on to the announcement from the ONS that the method for evaluating CPI is being changed to take into account housing costs? So in future the diffference between CPI and RPI will not be that big (ingoring the fact that for over a year CPI was higher than RPI anyway on the old basis).

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