What the Chancellor did do yesterday was to give a nod towards changing the inflation rate used for pensions uprating among other things from CPI to CPI(H).
What he said was that the rate would “over time” move to CPI(H) “when and where practical”. He added “CPI(H) is conceptually the best measure of inflation, but is relatively new and work is ongoing to understand its properties.” So no change anytime soon – but this is a reminder that future change remains on the Government’s agenda.
Within the Society we will be monitoring this very closely because as we said in the latest Pennant it could affect the pensions values of tens of thousands of our members, now and in the future. And how would a shift from CPI to CPI(H) work at the moment? Well, latest figures are for CPI 2.4% and for CPI(H) 2 .2% – which maybe explains why the Chancellor finds the prospect so interesting!