Public sector pension indexation will change from the Retail Price Index (RPI) to the Consumer Price Index (CPI) on 1 April 2011. This means a direct 15 per cent reduction in purchasing power for pensioners over the following 10 years. The pay freeze for these workers will permanently depress the value still further.
The change is a direct result of the Hutton Report into public sector pensions, commissioned by the Coalition government last year. The headlines were about false claims that these were “gold-plated” and impoverished other workers. But pensions for all workers are under threat too.
The aspirations and interests of 14 million British workers and their families will be subordinated to those of the class responsible for near collapse of the banking system so that it can be re-capitalised at our expense. More “big con” than “big society”.
Outside the public sector the Department for Work and Pensions has published an impact assessment of the cost implications for up-rating all benefits, including pensions, in line with the lower CPI as opposed to RPI. It shows that the value of these benefits would fall by £83.6 billion over the next 15 years. That’s 8.4 per cent more than the December 2010 estimate of £76.66 billion.