CPI tax in pension income

The Consumer Prices Index (CPI) was introduced in 1997
The scheme rules provided that the applicable index to be used for both indexation and revaluation was the “Index of Retail Prices…or any other suitable cost of living index selected by the trustees.” The rules, therefore, permitted the trustees to choose an index, such as CPI, instead of RPI.

The indexation rule provided that pensioners would have their pensions increased on April 1 each year. The revaluation rule operated so that the increase would be calculated upon the deferred member reaching the scheme’s normal retirement age, or the date of early retirement if this was earlier.