Reforming the Retail Prices Index – Trustee seeks judicial review

09 April 2021

On 25 November 2020, the Government and UK Statistics Authority (the UKSA) announced its plans to effectively replace the Retail Price Index (RPI) with the Consumer Price Index (CPIH) from 2030.

The Trustee has taken the decision to seek a judicial review of the decision made by HM Treasury and the UKSA to effectively replace RPI with CPIH from 2030. The Trustee has taken this action due to the impact this reform would have on members’ benefits and on the underlying value of the Scheme’s assets.


Every month, the Office for National Statistics (ONS) estimates the inflation rate in the UK by calculating the change in prices of a representative basket of goods and services.

The ONS uses three ways to measure price inflation:

  • Consumer Prices Index (CPI);
  • Consumer Prices Index + owner occupiers’ housing costs (CPIH); and
  • Retail Price Index (RPI).

These measures have widespread applications in the economy but are also used by many pension schemes to calculate annual increases to pension payments.

How does this impact the M&S Pension Scheme?

Scheme members currently receiving pension payments will have their annual pension increases calculated using RPI. For more information about how we apply pension increases click here.

Due to differences in the way RPI and CPIH are calculated, CPIH tends to be about 1% lower each year than RPI. This would mean that from 2030 onwards lower annual increases would be applied to pensions in payment.

In addition, to help manage inflation risk and volatility, the Scheme holds a proportion of its assets in Index Linked Gilts and other assets that have returns based on RPI. Whilst the Scheme remains well funded, the impact on pension scheme asset values as a result of these reforms will be significant.

Graham Oakley, Chairman of the Trustee Board, says:

“We believe that it is right to take this action in the form of a judicial review to ensure our position is considered and that the value and security of members’ pension benefits is protected.

The decision to pursue action in this way has not been taken lightly however we believe our priority should always be to act in the best interest of our pension scheme members”.

For more information, take a look at the media statement and the member Q&A.