Switch to CPI measure set to reduce benefits

MILLIONS?of pensioners will feel the pinch from April, when the government switches the measure used to shield them from rising prices.

The changes, which will also affect the unemployed and other benefit claimants, will see payments rise in line with inflation as measured by the consumer price index (CPI), as opposed to the retail price index (RPI) or Rossi Index, which are historically much higher.

Yesterday’s inflation figures put the CPI at 3.1 per cent in September, compared to 4.6 per cent for the RPI and 4.8 per cent for the Rossi Index.

September’s inflation figures are used to calculate benefit rises next April. Jobseeker’s allowance will now rise by £2.05 in April, to £67.50, instead of the £3.15 it would have done under the Rossi Index, which was used to calculate means-tested benefits before the switch.