HamishWilson says CPI could reduce the hole in public finances by up to£25bn
HamishWilson, the specialist pensions adviser, today said the recent move byGovernment to increase public sector pensions by reference to CPI (rather than RPI) could generate additional tax revenues of up to £25bn over the next few years.
Commenting Hamish Wilson said; ‘The Government plans to increase public sectorpensions using the Consumer Prices Index (CPI) (as opposed to the Retail Prices Index(RPI)) has caused quite a storm in the pensions world. They also want to extend this toprivate sector DB schemes. Reports suggest this could wipe up to £100bn from the valueof scheme liabilities – this looks not unreasonable to us.
But if that is correct, then this will mean up to £100bn less in deficit-reductioncontributions meaning more taxable profits and thus greater tax revenue of up to £25bnover the next few years. That’s a healthy contribution towards the Budget shortfall.
Of course, it will also mean smaller pensions which will mean lower tax on those pensions, but that is in the longer term.’
Media contacts:
For all media enquiries please contact Kate Boyle using the details below.
tel: +44 (0) 7930 442 883 / +44 (0) 208 590 1315
