The government and the UK Statistics Authority have launched a joint consultation on reforming the Retail Prices Index (RPI) that could have implications for pension schemes. The consultation invites input through 22 Apr 2020. Proposals include using the Consumer Prices Index (CPI) — including owner-occupiers’ housing costs (CPIH) methodology — to calculate the RPI; this likely would bring RPI increases closer to those of the CPI, which tends to be lower. Changes would be implemented between 2025 and 2030.
Changing the RPI to reflect CPIH inflation could have the following consequences for pension schemes: