Pensioners could lose out on £10,000

worried pensioner

Tomorrow, the average pensioner will find out if they are to lose out on nearly £10,000 during retirement, according to Hargreaves Lansdown.

The Office for National Statistics (ONS) has been consulting on whether to change the way the retail prices index (RPI) measure of inflation is calculated to bring it more in line with the consumer prices index measure.

The changes being considered would result in the index - which private sector pensions are linked to - rising more slowly in future.

Find the best annuity rate for your circumstances


Tom McPhail, head of pensions research at Hargreaves Lansdown, says: "This kind of change could prove to be the most damaging of stealth attacks on pensioner incomes.

"It appears innocuous but, over an entire retirement, it can slowly deprive pensioners of thousands of pounds."

Savers and investors could also lose out if the ONS decides to implement the proposed changes because RPI affects the value of inflation-linked savings certificates and index-linked bonds, or gilts, issued by the government.

Moneywise will keep you informed of tomorrow's decision.


More about

Your Comments

A bit late to start protesting methinks. The state pension is now linked to CPI not RPI. The public sector pensions are already linked to CPI not RPI. Or putting it another way, they are simply bringing all pensions in line.

Why then does the government not come out and say that private sector pensions will now be linked to CPI not RPI? Why tinker about with how RPI is measured?  They have an overall strategy of moving goalposts and generally deceiving people.

We only hear about pensions being affected, what about solar power, that is paid out based on RPI. All illistrations regarding solar power returns are based on an annual rise tied to RPI so the pay back caculation will be wrong, as I have just signed up for solar my return will be deminished.The goverment is going to save a lot more money that the press is saying.
What else is covered by RPI that a few know of but are not saying.
I will also be affected by RPI being reduced to CPI, ISA's are best al least it is your money for now.............