Pensioners could lose out on £10,000

Published by Laura Whitcombe on 11 January 2013.
Last updated on 11 January 2013

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.

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Damaging

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.

 

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