The NAPF responded to the ONS consultation on the calculation of the RPI and argued that the ONS must ensure the design of the RPI is appropriate in all regards before recommending any changes to the formulae used in its calculation.

The reduction in RPI that would be caused by ceasing use of the Carli at this time would have a number of serious ramifications including:

• A reputational risk for the UK Government caused by reducing the interest payments on government debt
• A reduction in liabilities for pension schemes using RPI to revalue and index their pensions.
• Legal implications for trustees over the interpretation of their pension scheme rules
• Reduced returns on RPI linked investments
• Reduced benefits for pensioners of both defined benefit and defined contribution schemes

These impacts must be afforded adequate consideration by the ONS, the Bank of England and the Chancellor of the Exchequer before any decision is taken.

The NAPF recommends that no change is made for the time being. Although a rationale for change exists the case has not been made and now is not the right time.

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