Pensions minister Steve Webb has been forced to explain how he assessed housing costs for pensioners when deciding to switch pension indexation from the RPI to CPI.
In a written question, Labour MP Andrew Smith asked Webb on Friday: "What account he took of the housing costs of pensioners when developing his proposals for the indexation of pensions by the consumer price index". Webb wrote in reply: "The RPI includes mortgage interest payments, which caused it to fall in 2009, leading to some elements of the state pension-principally additional pensions such as SERPS and S2P being frozen. "Only 7% of pensioners have a mortgage. The CPI excludes mortgage interest, which is not a relevant housing cost for the majority of pensioners. "We acknowled...
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