RPI Reform

There has been much debate regarding the appropriate inflation measure to use for the indexation of pensions in recent years. One of the most common indices used by pension schemes is the Retail Prices Index (RPI).

Common measures of inflation include the Retail Prices Index (RPI), the Consumer Prices Index (CPI) and the Consumer Prices Index including owner occupiers' housing costs (CPIH). While all three measure changes in the cost of goods and services, they use different calculation methodologies.

On 25 November 2020 the Chancellor confirmed that with effect from February 2030 the UK Statistics Authority (who are responsible for setting RPI from that date) intend for RPI to be aligned with CPIH.

In the Final Salary section of the Clifford Chance Pension Scheme, RPI is used to set increases to pensions once they are in payment, as well as for the revaluation of benefits prior to your retirement date. From 2030, it is therefore likely that any RPI based increases in the Scheme will be aligned to CPIH.