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Workplace Pensions: Retail Price Index

Question for Treasury

UIN 78653, tabled on 22 July 2020

To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the effect of reforming RPI to align with CPIH on employee pensions in (a) 2025 and (b) 2030.

Answered on

7 September 2020

The Retail Prices Index (RPI) is a measure of inflation with a number of shortcomings. To address these shortcomings, the UK Statistics Authority (UKSA) has made a proposal to reform RPI by bringing the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI. Owing to the use of RPI in specific index-linked gilts, prior to 2030 the Chancellor’s consent to this proposal is required before it can be implemented.

At the Budget in March, the government and UKSA launched a consultation to consider whether UKSA’s proposal should be implemented at a date other than 2030, and, if so, when between 2025 and 2030. The consultation closed for responses on 21 August. As part of the consultation, the government has sought views on the broader impacts of the proposed reform of RPI.

The government and UKSA will respond to the consultation in the autumn.

Answered by

Treasury