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PUBLIC-SECTOR workers are losing on average £650 a year from their pension because of a government dodge, Labour says.
Among austerity measures introduced by the Conservative-led coalition government in 2011 was the uprating of public-sector pensions by the consumer price index (CPI) instead of the retail price index (RPI).
The switch has resulted in public-sector workers losing on average £650 a year from their pension now, according to new research commissioned by Labour from the House of Commons Library.
RPI has long been the measure used to calculate the cost of living, but the Office for National Statistics no longer uses it.
Between 2011 and 2018, CPI uprating has resulted in cumulated increases of 19.7 per cent. However, RPI uprating would have been 27.8 per cent.
The figures suggest that the switch has resulted in pensions being £632 (average) and £454 (median) lower by 2018 per year than if RPI uprating had continued to be used.
Shadow chief secretary to the Treasury Peter Dowd said: “This is further evidence of this government’s plans to undermine the security of retirement, with hundreds of pounds having been slashed from the pensions of public-sector workers.
“Meanwhile the government is refusing to step in and resolve the pensions dispute in our universities and millions will have to work longer for less money under plans to increase the retirement age.
“These attacks on the security and dignity of those who have worked all their lives cannot continue.
“The next Labour government will end the cap on public-sector pay to ensure workers can afford to save for retirement, protect the value of the state pension through the ‘triple lock’ and leave the state pension age at 66 so we ensure security and dignity in retirement for the many not the few.”
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