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SERPS – Reversing The Loss of Financial Freedom

Comment 2nd July 2010

Despite promising the protect accrued rights (annual increases linked to RPI) the coalition government has effectively reduced future pensions by changing the link to CPI – typically a lower annual increase of between 1 and 1.5 percentage points. The rationale for this was erroneous to say the least (i.e. that the main difference between RPI and CPI related to housing costs and most pensioners owned their own home outright by then) and conveniently ignored the fact that CPI does not include Cuncil Tax or Building Insurance costs. The government should therefore either reinstate the link to RPI or ensure that CPI is re-calculated to include all relevant costs.

Why does this matter?

This reversal is essential if the basic living standards and financial freedoms of pensioners are not to be eroded.

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