[uk_rpi] [why_rpi]

Why is RPI so important? Well, it's not quite as important now as it was but it really used to be. Until 2011, when CPI was adopted instead, public service pensions had been formally linked to RPI movements since 1971. Over 2020/21, taking NHSPS together with PCSPS and TPS, we estimate that the pension outgo was higher than 25 b pa. They are the three largest public service pension schemes but there are others. Shifting from RPI to CPI is likely to have saved a great deal. Many private sector pension schemes are still linked, whether partially or fully, to RPI but any useful figures are hard to come by. Then there are the index-linked gilt-edged stocks, upon which income and capital payments are currently fully linked to RPI.

For the foreseeable future, even if it is no longer relevant to public service pension scheme benefit increases, RPI will need to be tracked for a long time to come. Unfortunately, the Statistics Authority has decided that the RPI does not comply with Principle 4 (specifically with Practice 5) of the Code of Practice for Official Statistics. Although ONS and Treasury have been forcibly requested to agree to repair RPI, this now seems unlikely to happen. Instead, a consultation was launched in March 2020, running until 21 August 2020 (extended due to Corona).