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Correction to RPI related changes affecting Final Salary Pensions
It has now been made clear that the reduction from 5% p.a. to 2.5% p.a. in the maximum rate of increase associating UK pensions with the Retail Price Index (RPI) will be limited to "pensions-in-payment".
The value of UK pensions that are not in payment will follow RPI but will continue to be allowed to increase up to a maximum 5% p.a.
RPI is currently at either zero or negative. The pensions industry is going to regard negative RPI as being zero. There is no intention to decrease the value of pensions in line with a negative RPI.
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