On the go: Chancellor of the exchequer Rishi Sunak has extended until August the consultation on how the retail price index should be reformed, to give businesses more time to respond.
In a letter to Sir David Norgrove, chair of the UK Statistics Authority, published on Thursday, Mr Sunak said he was extending the consultation period by four months in light of the coronavirus crisis.
Originally the consultation was due to close on April 22 with a government response before the summer parliamentary recess.
The consultation will now close for responses on August 21, depending on coronavirus-related developments, with a government response due in autumn. This is to give businesses and pension schemes more time to respond, as they are currently focused on mitigating the challenges Covid-19 has created.
The UK Statistics Authority has proposed aligning the RPI with the consumer price index including housing costs, which is expected to lower its annual rate by an average of 1 percentage point.
RPI generally runs at about 1 percentage point higher than CPI and is currently at 2.7 per cent, compared with 1.8 per cent for CPI. Compounded over the years, the choice of the less generous index can result in pensioners losing thousands of pounds, despite the CPI being considered a more accurate index.
This article originally appeared on FTAdviser.com
