It would affect savers, especially those with defined benefit pensions, as well as companies that invest in government debt linked to inflation (known as index-linked gilts).

The government and the UK Statistics Authority are consulting on reforms to align RPI to the historically lower Consumer Prices Index (including owner occupiers’ housing costs, CPIH).

The consultation proposes implementing the changes between 2025 and 2030. As some long-term saving products, especially defined benefit pensions, are linked to the RPI measure of inflation, changing to CPIH would significantly reduce the expected returns on these assets, leaving savers out of pocket.

Estimates by ABI members have found that implementing the proposed changes in 2025 could leave those affected worse off by up to £122bn by reducing the value of index-linked gilts. Even the latest proposed implementation date of 2030 would only reduce the impact to £96bn.

In its response to the consultation which closes today, the ABI is calling for the latest possible implementation date to reduce the impact on savers.

The ABI also recommends compensation for savers is considered given the financial implications for them and the wider economy if the reforms go ahead. It is expected people with life insurance, pensions policyholders and defined benefit pension scheme members will be most affected.

Hugh Savill, director of conduct and regulation at ABI, said: “It is widely accepted that the RPI model is less than perfect, but the proposal’s impact will be felt by policyholders and pension savers for decades.

“If the reforms go ahead, and given the impact for savers and the wider economy, it is vital the implementation date is later rather than sooner. Compensation by the Government should also be seriously considered to avoid creating winners and losers.”