Spending Review 2020 - government publishes response to reform to RPI methodology consultation
The government and the UK Statistics Authority (UKSA) have published their response to their consultation on reforms to the Retail Prices Index (RPI) methodology, following the Spending Review 2020. The response confirmed that the RPI is to be aligned with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) in order to address its statistical shortcomings. However, the Chancellor of the Exchequer has exercised his power to postpone implementation of this change until 2030, when the final specific index-linked gilt will mature. Simon Tyler, Legal Director at Pinsent Masons, Chris Edwards-Earl, senior associate at Stephenson Harwood, and Georgina Wardrop, senior associate at Taylor Wessing, discuss the reform to the RPI and what the reform means for pension schemes in particular.