Serkan Bektas, Rob Gall and Jos Vermeulen
The government announced on the 25 November 2020 that it will go ahead with planned reforms to the Retail Price Index (RPI), aligning it with the Consumer Price Index including owner occupiers’ housing costs (CPIH).
This is expected to reduce the future change in RPI from 2030 onwards by 1% per annum. Despite this significant news, the immediate market reaction has been somewhat muted.
This decision has been made despite substantial concerns being raised during the 2020 consultation, from a broad range of market participants. Another chapter in the RPI saga has drawn to a close, but with ten years until the decision is implemented, we struggle to believe that this is the final chapter, and we will continue to monitor this issue closely.
Listen to the team review the outcome, it’s impact on markets and the potential implications for pension schemes.