The level of pension increase to apply to any RPI linked element of your ESPS pension will this year be capped at 5% and is payable with effect from 1st April 2024.

Where RPI is above 5% for the year, the Sponsoring Employer of the Group, Electricity North West Limited, has the discretion to set the level of increase to a minimum of 5%, and has on this occasion chosen to do so. RPI for the 12 months to September 2023 (the reference date) was 8.9%.

We understand the decision was not taken lightly by the ENWL Board, however any potential impact to Customer bills as a result of uncertain market conditions is a significant risk for the Company to manage, and the pension scheme is not yet in a position of removing all risk of further deficit funding being required in the future, which would impact customer bills. Company performance expectations are also more challenging through the current ED2 pricing period which increases the financial risk to the Company, due to the level of investment required.

As full RPI increases are assumed within the scheme funding assumptions, and given the current healthy funding position, the Trustees requested a full RPI increase to be paid (and also noted other potential alternative increases in excess of the 5% cap). The Trustees, advised by the Scheme Actuary, have an alternative view to the Company and believe awarding a full RPI increase was both fair and affordable within the parameters of the pension scheme. The Trustees, whilst noting the Company’s explanation, are naturally disappointed with the Company decision and note the impact on pensioners, particularly those with smaller pensions in payment. However, we did welcome the opportunity to discuss with the Company and make representations on the issue.

The Company and the Trustees acknowledge and understand each other’s position, and accept the challenges Electricity North West has in mitigating the potential impact for their customers and the effect of this decision on pensioners.