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Impact on Society
18 January 2011
Uprating benefits and tax credits
Impact on Society
The government announced in the June budget that most benefits and tax credits would in future be uprated by the Consumer Prices Index (CPI) rather than the Rossi index and Retail Prices Index (RPI) which had been used in the past. The government argued at the time that the CPI offered a better measure of benefit recipients’ ‘inflation experiences’ both because of the way it was calculated and because of the goods and services it covered. IFS researchers evaluated this claim using household level data in a briefing note and subsequent observation, which attracted a substantial degree of interest from the media and policy-makers.
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