Switch to CPI shaved £126bn off public sector liabilities

The Whole of Government Accounts 2010/11, published today, show the liability for public sector pensions fell from £1.14trn in 2009/10 to £960bn by March last year. Re-indexing the pension benefits reduced the liability by £126bn, the accounts said. The remainder of the £175bn reduction was due to the payment of benefits, past service costs and actuarial losses. "The move from RPI to CPI lowers the value of the pension for services provided in the past and is likely to mean that the pension liability will remain smaller, as in the long term CPI is lower than RPI," the report said.