RPI to CPI costs pension savers £83bn

[Donki]

The DWP have published a new impact assessment of the move from RPI to CPI for pensions.

Robert Peston here

It looks rather worse than it did in the previous impact assessment.

by 2050 if you have a pension, it will be worth 20% less under CPI than it would have been under RPI...

I thought the quote at the bottom quite telling...
John Ralfe, the pensions expert, says "this is a reduction in the value of pensions to pension scheme members and is a transfer from them to shareholders".

Which shareholders? Pensions funds are themselves among the largest shareholders there are: might that help them? (I'm thinking Equitable Life, Prudential here).

Public sector pensions have been relinked in the same way: presumably transferring the value of the reduction back to the Government coffers.

The CPI RPI change refers to state pensions. It's been apparent for a long time (since the 1980's in fact) that the state pension is not designed to be a sole source of income. When Pension Credits were introduced, that was even more apparent. The message about saving for our own old age is not being taken up in big enough numbers yet... more people should heed this warning

Chil, The DWP said that this assessment applied to orivate sector defined benefit pensions.

"The main cost of this policy is to members of private sector defined benefit pension schemes who will see the anticipated value of their pension rights reduced and the value of their total remuneration package reduced in the short term."

It applies to the pensions of all public sector workers (not just the state retirement pension) and may apply to private pensions too (depending on the provider and what terms they offer).

I know it applies to the pensions of public sector workers all too well...

I think the point was that it will affect private pension holders in defined benefit schemes considerably more than had at first been anticipated.