Definition

A method of adjusting financial amounts, like salaries or benefits, based on changes in the cost of living, so that they keep up with inflation.

Example

The government implemented indexation to ensure that pensions would increase with inflation.

Conversation

Have you heard about the new indexation policy for wages?

Yeah, I read something about it — sounds like it could help a lot of people.

I think it’s great because it adjusts for inflation automatically.

Exactly! It should make a real difference to people's purchasing power.

Synonyms & Antonyms

Root Explanation

Indexation → It is formed from "index" (from Latin "index", meaning pointer or sign) and "-ation" (a suffix used to form nouns indicating an action or process). The word "indexation" refers to the process of adjusting or linking something to an index or standard.

Memory Tip

Think of an 'index' as a 'pointer' that helps you find information, and '-ation' indicates the process of doing something. So, indexation is the process of pointing or linking to a standard.

Visually Confused Words