PLSA response to Joint Treasury/UKSA consultation: Reform to Retail Prices Index (RPI) Methodology

The Government and the UK Statistics Authority (UKSA) launched a consultation in March 2020 seeking views on the alignment of RPI to CPIH, including among other things, the issue of timing, and whether the UKSA’s proposal could be implemented prior to 2030, and if so, when between 2025 and 2030.

The PLSA understands that RPI is a flawed measure of inflation, and supports plans to develop a more robust measure. However, we caution that if the Government takes the decision to proceed with aligning RPI with CPIH as planned, it must also take steps to mitigate the detrimental impact this change will have on holders of index-linked gilts, of which pension schemes are the predominant investors, as well as those who will be impacted as a result, namely pension scheme members.