‘Pensioners are paying for the pandemic!’ UK state pension rise branded ‘chicken feed’
State pension ‘not enough’ to retire on says financial advisor
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Pensioners will see their state pension increase by 3.1 percent next year but after the suspension of the triple lock, many have been left seething knowing they could have received an increase of more than eight percent. The Consumer Prices Index (CPI) figure for the triple lock was announced today, and Dennis Reed, director of Silver Voices, shared his reaction with Express.co.uk during an exclusive interview.
Mr Reed expressed his disappointment at the level of increase after the average earnings growth element of the triple lock was scrapped for 2022/23, which meant pensioners missed out on another five percent of extra income.
He highlighted how the Government’s ‘Eat Out to Help Out’ scheme ended on August 31, 2020, meaning restaurant prices shot back up and therefore would have meant a smaller increase in prices between September 2020 and 2021 compared to August 2020 and 2021. This could have impacted the rate of inflation announced this morning.
The campaigner said: “It’s a double whammy, because we’ve lost the earnings link for the coming year and the Consumer Prices Index is low, because of the Eat Out to Help Out scheme coming to an end last September.”
The state pension triple lock was temporarily suspended for the 2021/22 tax year due to an unusually high average earnings growth figure which would have meant the Government increasing the state pension by more than eight percent.
This was done because the Government believed the earnings figure was being artificially inflated due to the amount of people coming off the furlough scheme and returning to work as the COVID-19 pandemic eased.
However, Mr Reed implored the Chancellor of the Exchequer, Rishi Sunak, who is set to unveil his Autumn Budget next week, to reconsider and reinstate the triple lock from April 2021.
Mr Reed said: “I would urge the Chancellor, who has got a chance next week at his spending review, to review the decision to scrap the triple lock.”
Had the triple lock been implemented at 8.3 percent, people receiving the new full state pension would have received around an extra £14.91 per week, with those who get the full basic state pension receiving an additional £11.42.
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Instead, new full state pension recipients will get an extra £5.57, while those on the full basic state pension will receive an additional £4.27.
On the 3.1 percent increase, Mr Reed said: “It’s way below the level that is required. In a way, seven to nine pounds a week has been stolen from pensioners by this decision to scrap the triple lock that is vital to maintain the existing standard of living.
“What can you buy with four or five pounds a week? If you’re lucky you might be able to buy a pack of toilet rolls or a quick pint on a Friday night. It’s chicken feed, the increase that is going to be delivered to pensioners.”
He also expressed concerns about the possibility of inflation increasing in the coming months, which Mr Reed believes will leave pensioners essentially getting a “real-terms cut” in their standard of living.
He said: “Everybody knows inflation is going to sky rocket over the winter months, which means a cut in living standards for already hard-up pensioners, many of whom will be tipped over into poverty. There will be hundreds of thousands more older people in poverty.
“The whole reason the triple lock was brought in was because the UK state pension was so low compared to other developed countries, and it was intended to protect people’s standards of living against these spikes in inflation.
“It’s being swept away on the basis of one figure. It’s a lamentable mistake, as the eight percent figure would have just about protected people next April from the expected rise in the cost of living.”
By failing to honour the state pension triple lock for the 2021/22 tax year, the Government has broken a 2019 manifesto pledge, and this could have consequences in terms of the trust older people have in the Government.
Mr Reed said: “It’s not a good look, manifesto promises being broken. It’s hard not to draw the conclusion that older people are being made to pay for the pandemic by the cuts in their living standards, as a result of all these changes.
“We’ve got many former Conservative voters in our membership and most of them are saying to me that they’ve given up on the Government and they’re not prepared to vote for the conservatives again because of these attacks on benefits.
“That’s a reality the Government will have to juggle in the future. They are losing the support of a group which many people say got them elected in the first place.”
He also called for a review of the Winter Fuel Allowance, which allows pensioners to receive between £100 and £300 to help with the costs of heating their home during the winter. The value of the Winter Fuel Allowance has remained the same for a decade.
Mr Reed said: “The Winter Fuel Allowance hasn’t been increased since 2011. What’s the point of a Winter Fuel Allowance that is frozen and doesn’t take account of energy prices? I would like the Chancellor to look at it a bit more seriously at his spending review next week.”
A Government spokesperson said: “We’re committed to ensuring older people are able to live with the dignity and respect they deserve, and later this year we will confirm the new rate for State Pensions.
“The one off decision to temporarily suspend the Triple Lock ensures fairness for both pensioners and taxpayers – while also protecting pensioners’ incomes.”
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