Civil servants, unions and pensioners demand judicial review into switch to lower index for annual pension increases
An alliance of civil servants, police associations, the GMB union and pensioner groups are seeking a judicial review of what they claim is an "unacceptable" change to pensions which will cost some members thousands of pounds a year.
The review will challenge the government's decision to switch to the consumer prices index when uprating pensions rather than the retail prices index.
Unions claim the change will take £60 a year off the average pension, but over the longer term the cumulative effect could be much higher. Teachers' union NASUWT estimates that a teacher with an annual pension of £10,000 could lose £74,000 over 25 years.
Jonathan Baume, general secretary of the FDA, which represents top civil servants, including diplomats and government lawyers, said: "The government's decision – announced in the 2010 budget - to change the index for uprating of pensions for senior public servants is wholly unacceptable and potentially illegal. It would come on top of an across-the-board pay freeze for FDA members and proposed increases to pension scheme members' pension contributions.
"With CPI predicted to lag up to 1.5% behind RPI for the next five years to 2016, this change cuts at least 15% from the value of a pension and amounts to a considerable detrimental change that we are determined to oppose."
The challenge has brought together organisations representing millions of public sector workers and those already in retirement. Signatories to the legal challenge include the Civil Service Pensioners' Alliance, Prospect, the Police Federation, the National Association of Retired Police Officers and the GMB.
Brian Strutton, national secretary of the GMB said: "Two and a half million pensioners are drawing public sector pensions which they've always had uprated with RPI and had a legitimate expectation that this was their entitlement. Government has changed this without consultation, with the effect that from this month £60 is wiped off the average retired public sector worker's pension – and it will be a cumulative effect every year. So on their behalf trade unions are challenging the legal basis of government's decision and we are seeking permission for a judicial review in the High Court."
The unions' challenge to the government's decision is based on legal advice that in choosing the CPI, the Secretary of State has not acted within his legal authority nor strictly in accordance with section 150 of the Social Security Administration Act 1992 in adopting a measure of inflation that is, at least in part, directed towards changes in consumer behaviour rather than changes in prices, whereas the law requires him to have regard only to increases in the general level of prices.
The challenge is also likely to explore concerns by union members who bought added years on the basis that their pension would be uprated in future using RPI.