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

  • pensionsandsavings.com

    Pensioners are not the Chancellor’s cash machine – they need their promised protections

    Pensioners are not the Chancellor’s cash machine – they need their promised protections

    • 3.1% rise in State Pensions next year means a real terms cut, despite 2019 Manifesto commitments to protect pensioner. 
    • Scrapping the triple lock earnings link takes over £5billion away from pensioners next year – the Budget’s biggest cost-cutting measure. 
    • Pensioners should not be used as a cash machine to pay for spending elsewhere, such as a lower bank levy or alcohol duty, especially as we face a cost of living crisis. 
    • Tuesday’s Lords debate could stop this and ask MPs to think again as the Commons was not given correct information when it voted on the legislation to remove triple lock.  

    3.1% rise proposed for State Pensions next year is a real terms cut and a betrayal of Manifesto pledge:  I believe the Government needs to think again because this will certainly not be enough to protect pensioners against rising living costs. When the legislation to scrap the triple lock is debated on Tuesday in the Lords, we have a chance to vote to keep the earnings protection promised to pensioners in every party Manifesto.

    The Chancellor’s Budget speech announced 4% inflation which “is likely to rise further”: The Budget confirmed advice from the Office for Budget Responsibility (OBR) which said “We expect CPI inflation to reach 4.4% next year”, warning it could peak “at close to 5%”. It also added “And it could hit the highest rate seen in the UK for three decades”. Gas and electricity bills rose 12% last month, and food prices have risen too.  The OBR  Budget report (page 85) points out that, since March 2021, forecast average earnings figures for year 2021-22 have been revised upwards by 2.7% above the previous expected number and CPI is now expected to be 1.6% higher than previously anticipated. Clearly, the last few months have seen a significant change in expectations for next year, which means increasing State Pensions by just 3.1% is inadequate.

    Scrapping triple lock will save over £5billion a year, but pensioners should not be used as a cash machine to fund other spending: Abandoning the triple lock for pensioners is the biggest spending reduction in the Budget.  The Budget Red Book (page 136 Table 5.1) shows that by not sticking to the triple lock and using 3.1% CPI instead, the Treasury plans to save £5.4 billion in 2022-23, £5.8billion in 2023-24 and £6.1billion in 2023-34.  In the next five years over £30billion will be taken away from pensioners, leaving more than 12 million citizens worse off.  Too many chancellors have eyed pensions as a tempting target to raid when they want to find large sums of money. But pensioners should not have their pockets picked to fund projects for cash-strapped Governments.  Society has a duty to look after its elderly citizens.  EVen increasing pensions by 5% would still save around £3billion and protect pensioners in line with earnings.

    Not all pensioners are well off and this will leave many struggling to afford their everyday bills: Taking away proper protection for one year may seem alright if you believe the myth that pensioners are all pretty well off, but in the real world there are already over 2 million pensioners in poverty and the UK state pension is the lowest in the developed world according to the OECD.  Many pensioners already struggle to make ends meet and most have not just sailed through Covid-19 unscathed. Some are wealthy, but most are not. Only around 3% of pensioners earn enough to pay higher rate tax and pensioner poverty was actually rising before the pandemic. These older people are facing a cost of living crisis without the protection they were relying on. This is Parliament and politics at its worst. With a 6.6% rise in the living wage announced in the Budget to help families with the cost of living crisis and money found for so many other areas such as cutting bank levy or alcohol duty, it seems the Chancellor has not been straight with pensioners.

    MPs decision to scrap triple lock earnings link was based on false premise: MPs were asked to approve this measure after being told the only alternative to taking away the triple lock would be to uprate state pensions by over 8%, reflecting the ONS ‘Average Weekly Earnings’ figure for July. They were told this would cost an extra £5bn. It was on this basis that that Parliament decided to abandon the Manifesto commitment to protect pensioners, and the legislation passed through all the stages in the Commons in 2 ½ hours, with very few MPs present. However, these statements misrepresent reality.

    It is simply not correct that the Government had no alternative to an 8%+ rise:  It has insisted that it would have had to use the precise figure reported by the ONS for Average Weekly Earnings, because this is the statistic it has always used for last few years.  However, it would be perfectly in order to adjust this figure (which was over 8%) to take account of any upward bias caused by the exceptional effects of the pandemic on the labour market and the furlough scheme last year.  The actual wording of the 1992 Social Security Administration Act (which is the legislation we are amending and requires the Government to review the level of state pensions each year to ensure it keeps up with average earnings) allows the Government full discretion to use an earnings measure that is considered appropriate to reflect the impact of Covid-19 measures.  The 1992 Act (Section 150A subsection (8)) explicitly states that when reviewing how to uprate the state pension each year ‘the Secretary of State shall estimate the general level of earnings in such manner as he thinks fit’. Clearly, then, the law already allows the Government to adjust the ONS figure of over 8% to a lower number.  MPs were led to believe this was not possible.

    ONS, OBR statistics are available and Government has plenty of statisticians to produce revised figures:  In fact, there is a range of alternative numbers to use that give a better picture of the earnings increases.  The ONS has produced its own estimates and even more recently and the Budget analysis from the OBR reports earnings growth of 5% for 2021. It defies belief that the entire army of statisticians and actuaries in the DWP and Treasury are unable to produce a reasonable adjusted earnings figure to uprate state pensions next year.  Earnings protection is the most important element of pensioner protection.

    The Commons passed this legislation after assurances that 3.1% rise would protect pensioners against rising living costs: When MPs debated this legislation to scrap the triple lock for 2022-23 in September, Ministers gave the following assurance:

    ‘This Bill will ensure that a temporary statistical anomaly in wages does not unfairly track across into pensions, while also preserving the spending power of pensioners and protecting them from increases in the cost of living.’

    In summing up MPs were told the so-called ‘double lock’ of cpi or 2.5% ‘will ensure that pensioners’ spending power is preserved and that they are protected from the higher cost of living.’

    Since then, next year’s inflation outlook has sharply worsened due to recent rises in fuel bills and much higher inflation expectations for food and utilities. Indeed, September’s 3.1% cpi figure was artificially lowered by the effects of the pandemic on hotels and restaurants, as well as household services.   Sharp falls in these costs offset rising bills for fuel and food. How is it right that the Government says it cannot use the earnings statistics as they are too high, but instead wants to use a cpi number that is too low? Particularly when this is not even strictly necessary because the legislation would allow for the earnings figures to be adjusted for the pandemic.

    On Tuesday, the Lords could send this legislation back to the Commons for MPs to think again: The Bill to abandon the triple lock will be debated on Tuesday in the Lords and I am determined to try to ask Peers to support amendments that would keep the triple lock, ensure that the Secretary of State can adjust for any upward distortions on earnings from the pandemic and protects pensioners, particularly the poorest, as they were promised in 2019. I believe millions of pensioners deserve better treatment.  It’s time for Parliament to stand up and protect good citizens.  What are we there for if not to try to stop dangerous policies that are based on false information.


    36 thoughts on “Pensioners are not the Chancellor’s cash machine – they need their promised protections

    1. I totally agree, for this to happen is a travesty but even more so for 1950’s women who had to wait 5/6 extra years for their pension! Not only that but our state pension is one of the lowest anyway! We have been treated disgracefully and it breaks my heart.

    2. Thank you for this, I hope you are listened to , I got my pension at 66 after waiting an extra 6 years, I am now living on the state pension which is so hard to manage on. I can’t believe we have such a low pension In the UK. I’ve worked for 48 years and paid taxes and NI all those years

    3. Why does this Tory government have so little respect for the elderly. After a lifetime of work and 50 years of contributions they are tossed to one side because we are not any use to them anymore. Our state pension is well below the minimum wage how can that be fair that the elderly are left to struggle with the rising cost of living. The increase in the pension next April will soon be wiped out with the rise in Council Tax. We are one of the richest countries and to treat the elderly this way is disgraceful.

    4. This disproportionately affects women, old people, disabled people, and those who are in all three categories. If it disproportionally affected Black people, or a specific religious group, or any of the other equally ‘Protected’ groups under the current Equalities law, it would not have been proposed and certainly would not have passed.

    5. The tories Rob pensheners all the time. Idonot get the socald full alowens. Pensions in uk are the worst. Tories just line there fat walets every time. Robing bastads

    6. WASPI are still waiting for there pension. So an extra 6 yes to access one of the lowest OAP pensions in the world
      And yet the government are still trying to reduce it

    7. my husband receives £137 I receive £82 3.1%of his pension is a lot more than 3.1% of my pension I have a small private pension of £100 takes us out of pension credit £277per couple. We pay all dentists opticians and TV licence and higher energy bills we are in our 80’s his that a minimum wage?.

    8. Totally agree with these comments. The 50’s woman especially those born 53/54 were hit hard. We have the worst pensions and most pensioners are NOT well off. I thought the Tory government were better then that. It’s about time people started looking after the elderly of this country. It’s disgraceful. What are they showing the young people? Only that the elderly aren’t worth anything but we are.

    9. Governments have promised over many years to help pensioners but to no avail. Its really tough. We are totally forgotten about, working an extra 5/6 yrs to get our pension, then not getting what we paid in, social care on its knees with carers doing a fantastic job, household bills escalating its so hard but the government doesn’t realise and turns its back.

    10. Always seems like a ‘pass off’ when some speaks Benevolently on behalf of ‘poor’ Pensioners…Deeds not words are needed to pay back 1950s born women their ‘stolen /robbed/redirected ?’ paid and earned pittance of a State Pension .I am totally in despair of this being addressed fairly and soon before more people die in poverty waiting ! DEEDS NOT WORDS PLEASE !!!!!😫😥😡😡😡😡

    11. One of other things I think that was overlooked was fact that many pensioners who only have a small company pension pay income tax. Therefore offsetting the triple lock rise. But that of course wasn’t mentioned because the government prefer to let people think no pensioner pays tax.when many do.

    12. Women had to wait an extra 6 years for our pensions. The least that should happen is that it keeps up with inflation. How can pensions be below the minimum living wage/poverty line? Many pensioners are struggling.

    13. They see us as easy targets we are a proud generation who worked extremely hard and payed our dues without complaint for over in my case 49 years. Why are we being treated as second class citizens to be written of pushed aside. The goverment raised the living wage as this is what you need to live on. BLAH BLAH BLAH. If we don’t starve to death we will freeze to death.

    14. It has already been said a million times pensioners have been robbed blind by this government has ignored the elderly by moving pension age and underpaying pensioners for years DWP is not fit for purpose . This government just want pensioners just to go away quietly and due to save the money and the tax our offspring

    15. After waiting an extra 5 years for my pension , I find like many others , we are to ill to enjoy our retirement. What should be our twilight years , has turned into shear agony every single day. Those extra years we had to work , has broken us.
      Please do not add to the misery by removing the triple lock . Many pensioners will die due to lack of funds for food or heat.
      Those in Parliament do not have to worry about how they will manage. You are privileged and paid well by our taxes !

    16. I have worked from age 15.
      40 hour week.
      Paid in for 50 years.
      Just got my pension, I know I will struggle to pay my bills and eat !

    17. Dear Baroness Altmann and all in the House of Lords
      I was born in 1957 so I am a Waspi woman and still have 18 months before I get my State Pension. My husband on the other hand is 9 years older so removing the triple lock affects us tremendously. I worked for the government for 35 years and feel very left down as I only found out my pension age was changing to 66 on a pre retirement course! We pay ou taxes and will pay even more when I get my pension but living on 800 occupational pension means my husband is still supporting me, we don’t have a car, don’t go on fancy holidays we survive. The triple lock for many pensioners would be a lifeline. I think many more will be using food banks to survive this winter.

    18. Just one more kick in the teeth for the pensioner. Even the pension they pay today is a pittance. No one can survive comfortably on what the government call a pension.

    19. Disgraceful. This government are self absorbed and ignorant. They are clearly agist and dont give a stuff about the citizens of the uk.

    20. I had to wait an extra five years and eight months to receive my pension and trying to survive on a state pension is a real struggle. The triple lock was part of the Tory manifesto and they should stand by it,especially as we have one of the worst paid pensions in Europe.

    21. Thank you so much for taking a stand against this injustice. UK pensioners are struggling to meet the everyday costs of living. It is unfair for the elderly who have very small workplace pensions earned many years ago to be excluded from means-tested benefits. Now a below-inflation rise makes all much worse off.

    22. the government are not bothered about elderly as they are going to die soon anyway …. what use are we to them ?they are heartless and do not deserve anyone with any morales. vote .

    23. The government’s blatant will to ignore the thousands of complaints made by the women affected is in fact a form of genocide by stealth. Do they really think that by turning away from this they will get away with it.

    24. Ask the question how much the government saved by making women born in the 50’s wait up to an extra 6 years before drawing their state pensions.

    25. I’m pleased to hear that someone is looking out for us. I’m a Waspi woman born in 1953. I worked all my life from age 17 and paid National Insurance as a single person for the majority of my life. I contibuted to a variety of works and private pension schemes but sadly had to cash some of these in when it was decided that I would not retire at 60 as I had planned all my life to do. I cashed in the private pensions because of physical issues which prevented me working until I got my pension. Sickness benefit was insufficient to live on. I still have two annuities from my private pension pots and together with the state pension, my income amounts to approximately £4.90 an hour based on a 40 hour week, well below the minimum wage. I don’t consider this fair. With the prospect of further reductions to my income, I am seriously worried.

    26. I was born in 1958 ,and was looking forward like many others to retire at 60 ,suddenly the age shot up ,I am now out of work ,looking for work ,don’t get paid a penny ,only a pension stamp .I have applied for jobs and got replies (thanks but no thanks ) came back on many occasions ,I felt useless maybe age ? No job no pension ,no prospects .yet not even a mention from government .

    27. Dear Baroness Altmann,

      I read, with interest, the stand that you took in the House of Lords recently regarding the Government’s Social Security (Up-rating of Benefits) Bill, and I fully support your stand. I have also read the Silver Voices Briefing Note (https://mailchi.mp/silvervoices/triple-lockcop26?e=69b3d908e5 ).

      I am writing to you today on a related matter – ‘frozen’ UK State Pensions.

      My wife and I live in Canada, and we are both in receipt of a ‘frozen’ UK State Pension (so called because it is ‘frozen’ at the level first received). Canada is one of 106 countries where the UK State Pension is not annually indexed.

      Our UK State pension is ‘frozen’ simply because we decided to retire to live in Canada. If we lived less than 100 miles to the south, in the US, we would have been receiving the annual ‘triple lock’ increase. So far, we have received CAD 20,000 (£12,000) less than if we had either emigrated to the US or stayed in the UK.

      The UK is not the only country to have an increase to their energy and food prices. We also have increased energy and food prices! Our inflation rate in September was running at 4.4% and increasing by the month. The Canadian Dollar/UK exchange rate is also on the decline. How can you expect us to live above the poverty line on a State Pension that is reduced each year, in real terms? Many UK pensioners living here are dependent on the Canadian Government to bail them out. According to UK Government figures, over 22,000 UK pensioners living here in Canada receive a State Pension of less than £20 per week. The average in this cohort of pensioners is just £13 per week – can you live on that? I know that I can’t.

      There are close to half a million UK pensioners in the same position as my wife and myself. 95% of all ‘frozen’ UK pensioners live in Commonwealth countries – this just shows how important the Commonwealth is to this Government – Liechtenstein seems to be more important, because UK pensioners living their do have their UK State Pension annually increased because of Brexit and a new bilateral agreement between the UK and Liechtenstein which was recently negotiated. We all know that bilateral agreements are not required to uprate our State Pension – this was confirmed in 2013 with Freedom of Information Request (FOI) number 2013/595 that says unequivocally: “Bi-lateral agreements are not necessary in order for pensions paid outside of Great Britain and the EU to be up-rated”. It seems to me almost ABC – Anywhere But Canada!

      As you are aware, National Insurance Contributions and paid into the National Insurance Fund (NIF) and the State Pension is the largest payment from that fund. As Lord Sikka said (in the earlier House of Lords debate), there is a £37 billion surplus sitting in this Fund – incidentally, this is OUR money! The cost to uprate our ‘frozen’ pensions has been estimated by the Government to cost just £600 million a year. The cost for the Triple Lock uprating this year, according to Lord Sikka is somewhere in the £8 billion – £10 billion range. All of this goes to show that the Government can still maintain the Triple Lock whilst keeping to their Manifesto pledge. In addition, they can also uprate our ‘frozen’ pensions without having to raise any taxes or National Insurance Contributions (NICs).

      The government uses the balance in the NIF as a Cash Machine since it is used to offset the National Debt for which the government pays a paltry amount in interest for the use of that money.

      Baroness Altmann – from what you have previously said, I know that you support campaign groups such as the not-for-profit International Consortium of British Pensioners (ICBP) – http://www.pensionjustice.org, in their ongoing campaign, and presumably, the All-Party Parliamentary Group for Frozen British Pensions (APPG). Perhaps you could consider joining this group – I am sure that the Chair, Sir Roger Gale would love to have you on board. I was the previous Chair of the ICBP and worked alongside John Markham for a while until I had to give it up for health reasons. John is also in poor health these days.

      Please, can you be more vocal in your support in the House of Lords and press briefings? This issue needs greater visibility if it is to ever find itself on the Government’s agenda?

      You talk about pensioner poverty. How on earth are we expected year on year, to manage on the same pension that we first received? Does the Government not think that ‘frozen’ countries have rising inflation too? A 97-year-old woman living in Calgary, Canada, must choose food over rising energy prices. A 99-year-old in Vancouver, Canada lives within half a mile of the US border. If he lived just the other side of the border, in the US, then his UK State Pension would have been increased annually for the last 34 years – he has received over $100,000 less than if he either retired to the US or had remained in the UK. This just is not fair – on any level. These are decent people who worked all their lives in the UK and made their NICs. I, myself, have 39 years of NICs. Does this not entitle me to a decent State Pension, based on my NIC record, which increases in line with the ‘Triple Lock’?

      Many of these pensioners served in the armed forces, and fought for their country, and look at how Governments of all stripes have treated, and continue to treat, them. Out of sight, out of mind.

      The UK is the only OECD country (out of 35) that discriminates based on where a person lives.

      I am a member of the Canadian Alliance of British Pensioners (CABP). There is an organisation in Australia – British Pensions in Australia (BPiA). Between them, they created the umbrella organisation, ICBP, as mentioned above.

      Can you please help us, Baroness Altmann?

      Best of Luck in the House of Lords tomorrow (Tuesday).

      Kind regards,

    28. While the triple lock is very important in the Uprating Bill debate , you should not lose sight of the fact that when this bill is passed, for a very brief moment all UK pensioners are justifiably recognised with the annual increase…but a few moments later almost half a million pensioners living in all parts of the world get this needed increase ripped away from them because of a historical policy that successive governments happily cling to. It has to be stopped!
      We all paid in the same and we should all be treated equally regardless of where we live.

    29. What has this govt have against older people? Is Losing our Home and living in Destitution and Stress; working through ill-health for 6 years not enough for them? After a lifetime of inequality; hormonal differences; pain and inconvenience; bone loss and tiredness; pregnancy; childbirth; breastfeeding; caring for elderly and disabled (for free) meaning we get a far less pension anyway? This is hitting below the belt and they should look to cutting their own pay and allowances.

    30. Thank you for your comments which I agree with. As part of the Brexit agreement it was stated that as the worst state pension in Europe the triple lock must be implemented to give pensioners especially those without a private pension a basic allowance to live on. After 44 to 50 years of working, I would have thought that any government would stick to this agreement and not break their contract as they already have done with women born in the 1950’s
      I hope you and the rest of the House of Lords will bring this to the governments attention and advise them that another riot of pensioners as Thatcher saw with her Poll Tax policy will be quite a sight for this government to watch.
      Perhaps Rishi Sunak needs to readdress how he would feel in our position?

    31. Why are pensioners expected to live on less than the minimum wage with this pathetic pension which they receive. MPs need too wake up and start living in the real world. Not forgetting that they will be getting a gold plated pension.

    32. We have two sets of pensioners in the UK-those on the old state pension and those on the new state pension. A % increase in state pension only widens the gap between the two.

    33. The first place to start should be for MP’s to acknowledge the lack of ethical and diversity in this cases of increases (LOSS) in our pensions . It would demonstrate their understand if the plight of pensioners ( it s not a BENEFIT, AS WE PAY IN TO THIS SO CALLED NATIONAL INSURANCE)
      Over the last decade MPs pay has risen by over £16k, significantly above pay awards for other public sector employees such as nurses, teachers and police.
      That rise also gives a bigger pension rate set as the final salary pension, ie, wages raised by 3.1% increases as does expenses and golden handshakes. So it never one element when increasing wages.
      We as pensioners , never get this triangle of benefits, just one income(already paid into for 35year+ ), where as MP’s it only 13 years. Where is the equality for working class and pensioners . Their pay- rises costs have risen an additional 16K THREE TIMES HIGHER THAN A STATE PENSION.
      State Pensions is paid after 35 to 51 years of contributions whereas MPs’ pension scheme, called the Parliamentary Contributory Pension Fund (PCPF), is the pension scheme for MPs. The Fund is actually made up of two schemes – the MPs’ Pension Scheme and also a scheme for Ministers called the Ministerial Pension Scheme. Retirement is after 13 years, full pension, golden handshake, and they still get a state pension,. Pensions are tax if the lifetime allowance is breached, but why would they want a pittance . So be it but give us our pension years robbed, either as a deferred pension or lump sum,

    34. Thank you for speaking up for the pensioners, I left school at 15 and was 66 on the 1/11/55 only to find out from a social media post that my pension was not payable until 6 years later than I expected, now to add insult to injury I have to wait a further month before my first payment, that’s if I’m lucky and the DWP have caught up with the backlog !!! I wonder what I am supposed to live on for the next month ??? I am infuriated to have lost 6 years pension payments, as with many more pensioners I’m not sure how I’ll get by, heating or food ? Just one more thing I’d like to add, if Boris finds it difficult to live on £160 K p.a plus expenses, how on earth does he expect a pensioner to survive on their pittance ???

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