Pensioners could soon be losing out to the tune of £400 a year as their incomes are outpaced by the spiralling cost of living. It has been suggested that pensioners on final salary deals could lose £1.7 billion between them.
While many private sector defined benefit (DB) pensions increase in line with inflation, often this is subject to an annual cap, commonly set at 5%, XPS Pensions Group said. With inflation rising above the caps, pensions will lag behind.
The Consumer Prices Index (CPI) rose by 7% in the 12 months to March 2022, and the figure is expected to climb higher in the coming months.
