The Pensions and Lifetime Savings Association – the trade body that represents 1,300 pension schemes with 20m members – has joined the chorus of concern about the Government’s potential axing of the Retail Prices Index (RPI), the measure used to decide many annual pension increases.
The PLSA says that merging the RPI with the Consumer Price Index (CPIH) could see pension schemes up to £80bn worse off.
The Association of British Insurers also issued a warning today that killing off RPI as a separate measure, often higher than CPI, could cost pension savers up to £122bn.
The PLSA warning forms part of the PLSA’s response to the Treasury and UK Statistics Authority’s consultation paper on reforms to RPI.
The trade body says that Defined benefit (DB) pension schemes will be hit if the government decides to go ahead with the change because the RPI rate is “structurally higher than