- It’s not too late to save vital earnings protection for state pensions – can use adjusted ONS earnings figures of around 3.2%.
- Government still has time to rethink its panic decision to break Manifesto commitment to keep triple lock.
- House of Lords hasn’t yet passed legislation to remove precious earnings link and I hope Ministers will think again – poorest pensioners should not be abandoned as cost of living for them soars.
The ONS announcement of September’s CPI figure need not be the last word on state pension uprating. The 3.1% rise was distorted by the ending of last year’s ‘Eat Out To Help Out’ initiative which saw an artificial price jump in September. This one off effect ignores the sharp rises faced by pensioners in their food and fuel costs – while the most vulnerable were locked down last Summer and did not enjoy subsidised meals.
The Government promised triple lock protection in its Manifesto and, on the basis of a false premise, is now pushing through legislation to drop the most important part. Earnings uprating is vital and when it was dropped in the past, it led to rising pensioner poverty.
I urge the Government to think again, there is still time. The bill could be amended to specify that the earnings uprating does not need to use the over 8% ‘Average Weekly Eanings’ figure. It can instead use figures prepared by ONS that have adjusted for the impacts of furlough last year. These give a range of earnings which is far more reasonable and still allows the Government to protect pensioners against earnings rises, keep the triple lock promise and maintain the vital element of pension policy which protects the State Pension and the poorest pensioners.
Most importantly, the Pension Credit has never had triple lock protection and has had to be protected against earnings inflation. Many receiving Pension Credit are the most elderly who have no private pension to supplement state benefits. I am really concerned that these poorest pensioners will be at risk of rising poverty if the sudden removal of vital earnings linking sets a precedent that Governments can abandon them even during times of sharply rising living costs in the basic essentials.
I really hope the Chancellor will reconsider this dangerous policy choice and keep earnings protection – adjusted for last year’s pandemic – for our poorest pensioners.