• PENSIONSANDSAVINGS.COM

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

  • pensionsandsavings.com

    State pension must rise with inflation next year, no more betrayals or uncertainties

    State pension must rise with inflation next year, no more betrayals or uncertainties

    • It should be unthinkable to betray pensioners a second year running during a cost of living crisis.
    • Flip-flopping about protection for next year, after just 3.1% increase as inflation hits 10%, will create huge worries for millions of pensioners and undermines our social contract.
    • Trust in Government would be lost if promises made in 2019, and confirmed recently by both the previous and present Prime Ministers, are broken – not all pensioners are well-off!
    • Millions of pensioners rely on their State Pension and help with heating costs does not cover other essentials such as food and household items – another betrayal would be unforgiveable.
    • Cutting public spending can be planned for the medium term, but short-term pension promises are vital for the mental and physical wellbeing of millions of older people.

    Pensioners must have proper protection for next year: Millions of pensioners were betrayed this year when the 2019 Election Manifesto pledge of state pension protection was not honoured. After struggling through the pandemic, then battling the cost of living rises, pensioner poverty has been rising.

    The Basic State Pension is only around £7500 a year and rose just 3.1% from April, despite inflation reaching 10%:  The UK State Pension is hardly a king’s ransom – the basic pension being around £7,500 a year and even the full new State Pension is under £10,000 a year.  This leaves many pensioners struggling with the rising cost of living. The poorest, mostly women and those who were in low-paid careers, had no chance to build private pensions and rely almost completely on their State Pensions. Increasing numbers are at risk of falling into poverty.

    Both Liz Truss and Boris Johnson promised at least inflation increases for State Pensions – if that does not happen, trust in Government will be lost:  Pensioners were told in 2019, then again a few months ago by Boris Johnson and only a few days ago by Liz Truss, that their inflation increases were safe. Suddenly, those assurances are in doubt once more. Our welfare State is being undermined.

    Pension Policy is too important for flip-flopping: Millions of pensioners are struggling on just about the lowest State Pension in the developed world. They are used to scrimping and saving to try to make ends meet.  But in the middle of a cost of living crisis, they have no other way of affording their basic bills. They cannot earn more by working extra in the future. They are often already cutting spending to the basic minimum and short-changing them a second year in a row, during the worst cost of living crisis for decades, would be morally and socially wrong.

    Emergency heating help has been welcome, but pensioners also need to meet rising costs of food or other essentials: The Government has, commendably, introduced emergency extra help for pensioners this year, but this did not always cover the full energy cost increases and does not help with rising food bills, insurance and other essentials. Heartless statements by politicians who seem not to realise the extent of hardship among elderly people, have left many in despair about the future. Pensioners’ lives do matter, they should not bear the brunt of fiscal cutbacks or be caught in the middle of political gamesmanship. Yes, there are some well-off pensioners, but that is not the majority and 21st century Britain surely cannot claim that its meagre State Pension is unaffordable. These are policy choices.

    The commitment for the coming year must be honoured and I urge the Government to announce this immediately to reassure pensioners: Cutting costs is of course important to help solve a Government debt crisis, but not in this casual manner. Changes to pension spending should not be managed in this haphazard way. How to pay for state pensions can be part of medium-term planning, but for the coming year it is important that pensioners are not left in this kind of limbo, with promises being made and broken time and again.  It is undermining their mental wellbeing, causing huge anguish and undermines the whole basis of our welfare state social contract, where people have paid National Insurance for decades to provide their pensions in later life.


    Leave a Reply

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