Millions of workers lose pension battle with government

Three appeal judges have unanimously refused to overturn a High Court 2-1 majority ruling last December which backed the Government's approach. The case relates to Work and Pensions Secretary Iain Duncan Smith's decision to use the consumer price index (CPI) instead of the normally faster-rising retail price index (RPI) to measure price increases influencing pension upgrades. The unions say the CPI route will see the value of pensions cut by up to 20pc over a normal retirement, costing every affected worker thousands of pounds. They accused the Government of unlawfully attempting to reduce pension costs in the battle to cut the UK's financial deficit. The change from RPI to CPI is expected to save almost £6bn a year by 2014. But the Court said that where there were two different indexes, either of which could properly be used for the purpose of uprating public sector pensions, it was permissible for the Government to take into account the effect on the national economy when choosing between them.