Cover, benefits or payments on many of our plans increase each year on the anniversary of the start date. These increases are in line with increases in relevant index,
such as the Retail Prices Index (RPI) or the Average
Earnings Index (AEI).
The figure for this February’s RPI slowed to zero per cent and the AEI figure published in March dropped unexpectedly to below zero so there were no increases in these indices. This is the first time this has happened since the early 1960s.
As a result, we will not apply any increases to RPI or AEI-linked plans that go through an anniversary while the indices are at or below zero and cover and benefits will remain unchanged *.
If you have one of these plans, we will write to you ahead of your plan anniversary to explain the impact of zero or negative indices in more detail.
* Unless individual plan terms and conditions say we apply a minimum increase in these circumstances.
Some plans have a monthly indexed plan charge, which we review each year on 1 January. The charge is linked to AEI, using an averaged yearly index figure published shortly before the end of the previous year. As this figure was positive at that time, indexed plan charges have increased, increasing payments on these plans by a small amount of between 20p and 40p a month. Again, all figures shown in our communications are correct.
