From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Inflation increases for State Pension must be guaranteed right now – no more delay

    Inflation increases for State Pension must be guaranteed right now – no more delay

    • Government must reassure pensioners immediately, right here, right now, that their inflation protection is guaranteed, no more uncertainty!
    • It should be unthinkable to betray pensioners a second year running during a cost of living crisis.   
    • Millions of pensioners are fearful and furious that their meagre state pension may yet again fall behind inflation and this is affecting their mental health.   
    • Of course 21st Century Britain can afford inflation increases for the lowest State Pension in the developed world – it is a political and moral choice and Government must keep its word.  

    Pensioners are still living on just the 3.1% rise from last April: Millions of pensioners were betrayed this year when the 2019 Election Manifesto pledge of state pension protection was broken. After struggling through the pandemic, they are now battling the cost of living rises, and don’t know how they will manage if next year’s promised inflation increase is not honoured.

     UK Basic State Pension is only around £7500 a year and many of those eligible for Pension Credit uplifts don’t apply:  The State Pension and means-tested Pension Credit for the poorest, are under £10,000 a year. The Basic State Pension for the older pensioners (reaching state pension age before April 2016) is around £7,500 a year. Pensioners are not all well-off and many – especially women – have no private pension. They rely almost completely on their State Pensions and struggle to make ends meet – not for luxuries but for basic essentials.

     Rishi Sunak, when Chancellor, and Boris Johnson and Liz Truss, all promised inflation increases for next year – those assurances must be honoured:  Pensioners have trusted Government time and again that their inflation increases were safe. Yet apparently those assurances are in doubt once more. Pensioners mental health, as well as our welfare State are being undermined.

     Of course 21st Century Britain can afford inflation increases, this is a political choice: The UK State Pension is just about the lowest in the developed world. Pensioners used to living frugally have already cut back on luxuries. They are struggling to make ends meet in the middle of a cost of living crisis. They have no prospect of earning more from future work, or finding money elsewhere. Short-changing them a second year running, despite solemn promises this would not happen would be morally wrong. This is a political choice about who to spend money on and a moral decision about honouring one’s word. It would also be socially wrong.

     Pensioners must not be hit to please markets or balance the books next year: It is wrong to force pensioners to bear the brunt of fiscal cutbacks. Of course there are some well-off pensioners, but they are not the majority. Indeed, many of the poorest pensioners are too proud to claim the means-tested help that is available and those just above the cut-off are also in dire straits. Just focussing on ‘the most vulnerable’ will exclude millions from help and the inflation increases must be paid to every pensioner as we try to reduce pensioner poverty and misery.

     I urge the Government to make an immediate announcement of inflation increases for next year to reassure pensioners: Pensioners are once again feeling in limbo. This on-again, off-again approach is not worthy of a sensible Government and undermines the whole basis of our welfare state social contract, where people have paid National Insurance for decades to provide a basic pension in later life.

     This is a question of honour and basic values, no more obfuscation or delay. Just do the right thing today.

    5 thoughts on “Inflation increases for State Pension must be guaranteed right now – no more delay

    1. You are 100% correct, Ros’. However, I think there are some political games being played out. There are about 12,000,000 pensioner votes at stake on this decision; as we know, there will be no announcement from the Chancellor until mid-November. Just in time for the benefits from the markets to be included, hopefully followed by an inflation matching increase in pensions.

    2. The Tory 2019 election manifesto promised to keep the triple lock. Liz Truss, before her downfall, told Parliament the triple lock promise would be kept and, at the time, the present Chancellor was sitting next to her. If these promises are broken trust in the Tory party will be lost. It is likely they’ll loose the next election, as, no doubt, Labour will promise to restore the triple lock. Food inflation is now running at 14 to 20%, hitting pensioners and families hard. I’m sure the PM and Chancellor are in deep discussion trying to find savings whilst protecting the most vulnerable, pensioners who’ve worked all their lives and paid into the system. The big questions of how the government will find the extra money are, as yet, unanswered. The choices between more tax and/or cuts are stark .

    Leave a Reply

    Your email address will not be published. Required fields are marked *