Changes to pension rates announced (quietly)

I was looking at the idea of annuities and pensions (I was shocked by the numbers, but that’s a story for another time), and came across this potentially important story.

So it seems that the government is changing the way it calculates ‘inflation’ for the purposes of financial matters - such as maximum price increases for train tickets, or how much your pension should increase by. Thankfully it seems to be scheduled for 2030, so there’s some time to plan for it.

It may be a statistical question, but it seems that the outcome is a decision to switch to a new measure for Consumer Prices Index that includes some housing related measures (hence from CPI to CPIH) and that since this measure is consistently lower than the existing one, it means that some pensions will grow at a lower rate too.

If you are planning on living off a final salary pension, or buying an annuity, this will affect you.

In case the link above is too technical I also found this link with the newspaper’s customary opinionated approach, but it is a little easier to read