In Word, click on Tools | AutoCorrect Options | AutoFormat As You Type |
check the "Set left- and first-indent with tabs and backspaces" box | OK.

Paul wrote:
Hello all,

Looks like Word has stopped using a press of the tab key to change the
indent level in a list. When I hit tab, the cursor simply jumps a tab space
over with the list level remaining right where it was. Any suggestions on why
it's doing this and how to put it back to normal?

Many thanks