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Spending Review: RPI inflation will be phased out in February 2030

Added 11-26-20 06:36:03am EST - “The Treasury today handed investors and pensioners a reprieve by declining to phase out a flawed way of measuring inflation until 2030, but they still face a more than ” - Dailymail.co.uk

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Posted By TheNewsCommenter: From Dailymail.co.uk: “Flawed RPI won't be scrapped until 2030, Treasury confirms”. Below is an excerpt from the article.

The Treasury today handed investors and pensioners a reprieve by declining to phase out a flawed way of measuring inflation until 2030, but they still face a more than £100billion hit from the shake-up in the long run.

The retail prices index measure of inflation will be altered in February 2030, saving the Government £2billion a year in interest payments on RPI-linked bonds, the last of which will be issued in a decade's time.

The Chancellor's decision not to bring forward the move is a relief for investors, insurers and pension funds who were expecting an even bigger hit if the changes were brought in as soon as 2025, but they still face a £122billion one.

And it means students and commuters will continue to face higher bills for the next decade, as the interest on student loans and the cost of train tickets rise in line with RPI.

Rishi Sunak said in a letter published today that RPI would be phased out from 2030, but not sooner to protect holders of inflation-linked Government bonds

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