‘Millions’ of pensioners may lose billions in retirement as Rishi Sunak mulls tweak

Britons warned of damaging impact of rising inflation

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The warning has been issued relating to Britons who have worked for major giants such as BT, Marks and Spencer and Ford. It is thought nearly 450,000 in these schemes could see their pensions become smaller from 2030, if a Government tweak goes ahead.

At present, many of these workers have retirement pots which increase each year in line with Retail Prices Index (RPI) inflation.

Typically, RPI is higher than its other inflation counterpart: the consumer prices index (CPI). 

However, the Government is currently considering whether this should still be the case.

It is looking at changing how RPI is calculated, which means it could be brought more in line with CPI.

The dispute on the matter is now being heard in the High Court in London, where BT, Marks and Spencer and Ford pension schemes are being heard.

The court was told anyone in a scheme where increases are linked to RPI will stand to lose out.

BT stated such a move could impact 82,000 members of its scheme, and could average £34,000 each.

Those affected could see some four to nine percent slashed from their pensions.

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It was also argued women would be hit the worst as they tend to live for longer.

The Government has already confirmed there will be no compensation available to those who miss out.

Previously commenting on the matter, Tom Selby, senior analyst at AJ Bell, said: “The message is unequivocal: if you are negatively impacted by this, tough.

“The Government is clear it will not provide any kind of compensation to those who lose out as a result.”

The case is ongoing with a variety of arguments being heard on the matter.

It is expected a decision will be reached in approximately three months.

Trustees of the pension schemes of BT, Ford and Marks and Spencer previously released a joint statement on the matter.

They said: “It is estimated that over 10 million pensioners, through no fault of their own, will be poorer in retirement either from lower payments or lower transfer values as a result of the effective replacement of RPI with CPIH.

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“The reform also significantly reduces the value of RPI-linked assets held to meet pension promises to members.

“It weakens schemes’ funding positions and, in turn, adding pressure on sponsoring employers.”

Express.co.uk has contacted HM Treasury for comment. 

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