Pensions RPI Court Hearing
Tuesday 25
th October 2011
GMB TAKES GOVERNMENT TO COURT OVER
PENSIONS UPRATING FORMULA WHICH WILL LEAD TO DECLINE IN VALUE OF
PENSIONS
The change in pension indexation
affects almost everyone who retires in the UK and will lead to cuts
of up to 25% over time says GMB
GMB alongside other unions and pensioner
organisations representing private and public sector pensioners are
in the High Court today taking legal action against the
government’s unilateral cut to pensions indexation. See notes
to editors for details.
A total of 12 trade unions and pensioner
organisations are party to two Judicial Reviews that are being
heard together in the High Court this week. GMB believes that
government’s decision to change the indexation of millions of
pensioners’ pensions from RPI to the cheaper CPI measure was
wrong.
DWP has estimated that pensioners will lose
around £80billion as a result of this change. In the public
sector some retirement incomes will be 25% lower as a direct
consequence of this move which was not consulted on and not
properly considered.
Naomi Cooke, GMB National Pensions Officer
said, “The change in pension indexation affects almost
everyone who retires in the UK and will lead to cuts of up to 25%
over time. Private and public sector pensions have lost value
because of this change and those reliant on the state pension have
had government’s much heralded ‘triple lock’ undermined by this
cut. While the Tories fall back into their usual internal
battles over the EU it is the ill-considered policies they
are imposing that are causing real suffering in Britain
today.
GMB is taking this action because the
application of CPI as the measure of pension indexation is
wrong. CPI is not a match for pensioner inflation, everyone
knows fuel and food prices are going through the roof yet
government have taken the decision to use the cheapest cost of
living index available. It’s not fair to the millions of
today’s pensioners that are losing out and is undermining the
confidence of everyone else who is planning for their own
retirement.
Government policy on pensions is a
mess. The CPI change is just one more example of the
catalogue of misguided policy that includes the state pension age
fiasco, the demolition of public sector pensions and watering down
of auto-enrolment. It’s not just euro-sceptics that lack
confidence in the Prime Minister, pensioners and pension savers are
asking why they are paying the price for others’
mistakes.”
Ends
Contact: Naomi Cooke, GMB National Pensions
Officer on 07739 919633 or GMB Press Office Steve Pryle on 07921
289880 or Rose Conroy on 07974 251823
Notes to Editors
The other five claimants with GMB are
Prospect, FDA, Police Federation, National Association of Retired
Police Officers and the Civil Service Pensioners’ Alliance.
In the 2010 Budget the Chancellor announced
that in future the Pension Increases Act that is the basis for the
indexation of occupational pensions in the public sector and much
of the private sector will reflect the CPI measure of inflation
rather than the RPI measure as previously.
CPI is generally around 1% lower than RPI.
The ‘triple lock’ that the DWP use for the
indexation of the Basic State Pension is the higher of CPI, average
earnings and 2.5%.