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Consumer price index switch will save Treasury £13 billion
by William Robins on Jun 22, 2010 at 16:22
The Chancellor has announced he will link all benefits, tax credits and public sector pensions to the consumer price index (CPI), saving £13.15 billion over four years.
The CPI will replace the retail price index (RPI) as the index used by public sector pension schemes to track the cost of living.
Unlike the RPI the CPI does not include mortgage interest payments which rise with interest rates and council tax.
According to the Treasury's figures, switching the index would save the Exchequer £1.17 billion in 2011/2012, £2.24 billion in 2012/13, £3.9 billion in 2013/14 and £5.84 billion in 2014/15.
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1 comment so far. Why not have your say?
Anonymous 1 needed this 'off the record'
Jun 26, 2010 at 22:52
How does any UK government expect people to voluntarily part-take in pension schemes that they generate when they unilaterally change the methods of calculation and save billions of pounds per year. If they are saving (cutting), the recipient must be getting less. The three main parties have all been involved in the last 18 months -- Labour's effort was in relation to non-payment of a Serps increase 'in fairness to those on private pensions'. Fairness in politics is certainly unknown in recent times.
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