Unions challenge pension change ruling by High Court

Unions are challenging a High Court ruling that changes to how the NHS pension scheme tracks inflation are lawful.

Government changes mean that public sector pension schemes, including the NHS scheme, now use inflation calculations based on the Consumer Price Index (CPI) instead of the Retail Prices Index (RPI).

The inflation figure calculated from the CPI is lower than that from RPI, which does not include items such as council tax and mortgage payments. This will mean that, in the coming years, NHS pensions will increase by less per year than it has in previous years.

A judicial review challenged the switch to CPI-based calculation, which was announced in the June 2010 budget. The review was launched by six unions: the Fire Brigades' Union, teachers' union NASUWT, Prison Officers Association, Public and Commercial Services union, UNISON and Unite.

The unions argued that the change was a deficit reduction measure and therefore unlawful under social security legislation.

The High Court ruled against the unions, in favour of the government.

All three High Court judges agreed with the unions that deficit reduction was the motivation for the switch. But two of them said the Secretary of State for Work and Pensions was within his rights to take into account public finances.

October’s inflation figures put CPI at 5% and RPI at 5.4%. Unions warned that this would mean that the loss to existing public sector pensions would be around 15%.

Dave Prentis, general secretary of UNISON, said: ‘The loss to existing public sector pensions and many in the private sector had been estimated at around 15%.

‘According to the Chancellor, the switch [to CPI] was taken to take ‘Britain out of the financial danger zone’ but the switch will put millions of workers and pensioners into the ‘financial danger zone’.’

BMA figures have shown that the change to CPI could have a dramatic effect on doctors' pensions.

A newly retired doctor, retiring at the age of 65 with an initial pension of £35,000, would be worse off under CPI uprating by a total of £2,000 by the age of 70, the BMA said. By the age of 85 the doctor would be £124,500 worse off.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins


Already registered?

Sign in

Follow Us:

Just published

The original Moderna COVID-19 vaccine

First COVID-19 vaccine to target Omicron variant approved for use in UK

The MHRA has approved an updated version of the Moderna vaccine that targets both...

Ballot box

Majority of GPs back taking industrial action in the coming year, poll suggests

The majority of GPs support taking industrial action in the coming 12 months to push...

RCGP sign

NHS winter plan does not provide enough support for GPs, warns RCGP

NHS England's winter plan does not include enough measures to support general practice...

NHS sign

Plans to recruit 1,000 new link workers to support GP practices this winter

NHS England has set out plans to recruit an additional 1,000 social prescribing link...

BMA House

BMA prepares to ballot junior doctors on industrial action

Junior doctors will be balloted over industrial action if the government does not...

Typing on a laptop

NHS 111 systems could be offline until next week following cyber attack

NHS 111 systems could be offline until next week following the cyber attack on a...