To ask the Chancellor of the Exchequer, what estimate his Department has made of the amount accruing to the Exchequer from the adoption of Consumer Prices Index Including Owner Occupiers' Housing Costs in relation to index-linked gilts from 2030; and whether he has plans to compensate pensioners in the event that their pension pots are reduced as a result of that matter.
30 March 2021
Owing to shortcomings in its calculation, the UK Statistics Authority (UKSA) intends to bring the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into the Retail Prices Index (RPI). On 25 November 2020, the Government and UKSA published their response to the consultation on the reform to RPI.
The Government will not offer compensation to the holders of index-linked gilts. The contractual terms of all index-linked gilts state that the RPI should be used to determine the index ratio which is used to calculate interest and redemption payments. There will be no change to this flowing from the implementation of UKSA’s reform.
For further information please see the consultation response at: https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology.