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

  • pensionsandsavings.com

    The Autumn Statement – good to see inflation protection and triple lock promises honoured

    The Autumn Statement – good to see inflation protection and triple lock promises honoured

    • Delighted to see Chancellor keeping the State Pension triple lock promise.
    • Ensuring State Pensions and Pension Credit rise by 10.1% cpi for next year is the right decision. 
    • I also welcome the inflation protection for all other benefits as inflation has soared.


    Today’s fiscal statement will come as a big relief to millions of worried pensioners.  It is great to see that the Chancellor has decided to honour past commitments to uprate State Pensions in line with September’s 10.1% cpi inflation figure.


    It was also absolutely right to announce that Pension Credit and Universal Credit will also rise by 10.1%: The poorest pensioners need means-tested Pension Credit and benefits such as Universal Credit are paid to the poorest working-age citizens who will also rightly receive full inflation uprating for next year. In the middle of a cost of living crisis, with inflation still rising and not yet under control, it is vital that we protect the most vulnerable.


    The poorest pensioners only received a 3.1% increase in April, while prices have rocketed. Those relying on benefits have been particularly hard hit recently. This has hit millions of pensioners hard as they spend a higher proportion of their income on staple foods, heating and basic essentials which have increased by well over the average cpi. They tend to live frugally and can hardly look forward to being able to earn more in future, they are often wholly reliant on the State.


    Just ‘targeting’ state pensions on the poorest pensioners would be damaging: There are calls to means-test the State Pension rather than paying benefits to all. This would be undermine our whole national insurance system.  Today’s pensioners have contributed throughout their lives on the understanding they would have a State Pension in retirement, but the UK’s state pension would only provide a low basic amount, not enough for a great lifestyle. Britain has always relied on spending enormous sums each year to incentivise individuals and employers to build up good private pensions to supplement the low state retirement benefits. Other countries social insurance pensions are far more generous.


    Gordon Brown tried extending means-testing and it was a disaster: About twenty years ago, the then Government decided to focus public spending on the poorest pensioners, by increasing the generosity of means-testing. Rather than increasing state pensions for everyone, Pension Credit was introduced to pay more to those who qualified. That sounded sensible as a short-term policy decision to address the poorest pensioners directly, but the policy did not work.


    Pensioner poverty rose, private pension contributions collapsed and millions did not claim:  Within a few years, pensioner poverty rates had risen and private pension savings had collapsed, because more and more people on lower or middle incomes realised it might not be worth bothering to save.  If they could lose most or all their private pension income in a means-test, or if having a small pension excluded them from state benefits that others who did not contribute to pensions were receiving, then they quite understandably decided not to bother saving. And many pensioners are too proud, or private, to want to claim.  So, the short-term attraction of extra means-testing for pensions had seriously damaging long-term consequences.


    Means-testing excludes many poor people as there is a stark cut-off. The means-test income threshold is only around £10,000 a year, but pensioners with tiny amounts of private pension with incomes of, say, £10,500 a year, would be excluded.  In addition, means-testing the state pension undermines our whole welfare system. National Insurance has always been a pay-as-you-go system and the inter-generational transfers are a fundamental part of our welfare state. For today’s commentators to complain that working age people are paying to support more older people, ignores the fact that today’s pensioners supported those older than themselves in the past. With around half the population having little or no private pension, especially among women, there are enormous income disparities among older age groups. Of course, there are well-off pensioners, who may not really ‘need’ the state pension they receive but that is the deal and how our system works.


    There are better ways for the Government to save money in its overall pension budget. Areas that could be reformed to cut costs would include rolling the add-on pensioner benefits and ‘freebies’ into a higher State Pension, rather than paying them separately.  Winter Fuel Payments, Christmas Bonus, free travel and other benefits are all tax-free for pensioners, even though the State Pension itself is taxed. It would make sense to pay more in State Pension and recoup some of the money from the better off pensioners in tax. Addressing the costs of tax relief for private pensions could also free up huge sums for the Exchequer and ensure adequate resourcing for the basic state pension underpin. Currently, tens of billions of pounds are spent on the second-tier of pensions, while there is said to be insufficient money for the basic first tier.


    To begrudge pensioners the small State Pension sets up worrying societal tensions which can damage social cohesion.  How we look after the elderly in our society, who have built this country over many years, is a political choice and I am pleased that the Chancellor has made the right decision to properly protect pensioners.

    26 thoughts on “The Autumn Statement – good to see inflation protection and triple lock promises honoured

    1. Yes ,there is alot of wise analysis here.Especially around means testing when it can be recouped via tax.Unfortunately we still don’t know what and when the Government are going to deal with the “ Maladministration “result by the Onbudsmans conclusion.
      Thankyou Ros Altman

    2. So good to read after recent years Govts setting younger generations against older generations (ie their own parents, grandparents, great grandparents & other older relatives!). Also never mentioned are the millions of childless over 60s who worked from age 15-18 to 60-66 or beyond, whose taxes paid/pay for other people’s children’s hospital costs, free childcare, education, Govt savings boosting schemes etc, but which was/is done without bearing any grudge. Those people probably pay more to charity too. We all pay taxes and NI for the WHOLE of Society, of any age, not just ourselves and our own generation.

    3. Why is this country a two tier pension system,£141 for pensioner over 80yrs old worked 65yrs and £189for pensioners who have to work till 67yrs old this is not right, no working man had the chance to afford or get into a private pension scheme, only professionals had that chance.

      1. My Mum aged 86 gets a higher state pension than I will get after working for 50 years .. because all the rules were trashed in 2016… ie uplift to my state pension through NI contributions that my late husband made for 32 years and never collected a penny of the

    4. What a shame you did not think like this when you were Pensions Minister. You could have done so much for WASPI women, still no compensation I will be dead before the desicion is finalised.

    5. I am a WASPI woman I wrote to your Department when you were the Pension Minister and received an indifferent response.
      I worked from the age of 16 when I started women had no rights to join private pension schemes.
      I had a family in my mid 20’s, stayed at home, no child care facilities then and worked evenings. When my youngest child was 6 I returned to full time work.
      It took me a long time to join my company pension scheme despite I kept asking, but eventually after 5 years of service I was allowed to join…. I did not know I had been opted out and then my company closed the Final Salary Pension scheme down I was in my early 50’s and would have had to have worked another 25 years to build up a decent pension.
      So here I am now receiving a monthly private pension of £98 per month and my state pension being reduced by £130 because I was opted out!
      So despite paying into a private pension I am financially being punished for doing so.
      To add insult to injury, I then had to wait till I was 66 (not 60) to get my state pension.
      I had a Saturday job from the age of 12, even when I started working at 16 I still worked the Saturday job and went to Day Release and night school to get all my qualifications.
      I paid into the system for most of my working life and now I am told it is a ‘benefit’ and I am made to feel that I am lucky to be getting it. Even one of the employees at the pension office when I queried the opting out deduction, said to me, ‘Well your a Baby Boomer you made a load of money on your house’ I guess we had it easy 14% interest rates, hellish inflation, Oil crisis… I have to laugh now when they are all moaning about interest rates and they cannot have their 2 cars and 5 holidays a year..
      Anyway, I am digressing… We were a generation of women who fought for women’s rights and worked hard to give our children the opportunities we never had. Going to university and having a career, not that we were not capable, but because we were unable too and now we are told it’s all about equality… I never had equality then and I do not have equality now!

      1. So eloquently put. I relate to your story as do most women of our age. We worked, hardly had a chance to save whilst interest rates on mortgages were so high, no child care so work , take a lesser paid part time job or stay at home decisions had to be made.
        And here we are after a life time of work and asking for nothing…and we’re getting nothing!

        1. It is so frustrating… My husband actually worked less years than me overall as he was sick and had to stop work. I not only worked full time, but had to take on the extra burden of him being ill… He now has a far better state and private pension than I do and technically I am financially supported by him…

          I am lucky that I am married and happy in that marriage, but I know a lot of women who were divorced and do not have the luxury of a joint financial pot. Their settlements were also based on getting their state pension at 60 years, which if they had, would also not have been affected by being ‘opted out’.

          Which beggars the question, that if it had been widely known that women’s pension age was being raised to 66, why were the divorce lawyers and judges not taking this into account on settlement….

          The Government can turn away, but this just further proves that there was maladministration.

    6. People of my generation have worked all their lives and paid into the National Insurance for many years. The state pension is not a benefit it is something that has been paid for by individuals. Our state pension is the worst in Europe. No way should it ever be means tested. It out right. Also being female I lost out on a lot of pension and support WASPI for mismanagement of retirement age.

    7. I have so much time for Baroness Altman. It’s such a pity there are not more of her calibre in government. We might not be in such a mess if so.

    8. Is there anything you can do personally to help the WASPI women who have been fighting for a very long time to get what is rightfully due to them.

    9. Funny how when we were working we weren’t ‘means tested’ as to whether we could afford to pay NI etc and support the pensioners before us but now they are hell bent on taking our pensions through ‘means testing’.

    10. Means testing pension undermines everything that they encourage from early working age …

      Save for your thigh light years – why save if your going to be taxed …😡

      Goverments are constantly changing the goal post – I am a WASPI woman who has had enough of an impact on pension robbery without been worried if and when I do get my state pension it will be reduced due to my private savings ….
      It has been reduced enough !!
      If a private individual took money away from somebody by deception it closed as a criminal offence ..

      The government made me pay as was law NI to contribute towards OAP – that monies was robbed from us for a further 6 years …

      Means testing pensions is so wrong ..

      Targeting g huge companies that trade on our shores and pay no tax is the right thing to do 😡

    11. Thank you for this considered piece, I agree with a lot of it.
      Pity you missed the opportunity to at least consider the WASPI women.
      Also the comment ‘ National Insurance has always been a pay-as-you-go system ’
      This has never been my, or many other people’s impression. Consider the ‘Contracting out’ of the scheme, surely one can only do this if you have a ‘Contract’
      I understood I was paying towards my pension, as well as contributing to National assistance to others. This was daylight robbery of vulnerable women who did not have the opportunity of men to build their pensions added to which women were abandoned by their husbands without support when they were divorced for a younger model .
      Many women have died due to the callousness of the increase in pension age. It is a known malpractice which is being ignored.

    12. Why should the pensioners be means tested we paid into the system for 50years + and
      Also in to our private pension so we could have a better quality of life in retirement and done with out a lot of luxerys while we were working thes government is shocking and the so called silver surferd (pensioners) will just stop voting

    13. I’m still waiting for my state pension and when I get it I will have paid in 50 years and 6 months of national insurance payments .
      I cared for 3 of my elderly relatives , firstly a bachelor octogenarian uncle , then both of my parents , my dad affected from COPD , and mum with Alzheimer’s and during her last 3 years , inoperable breast cancer .
      No one to help me , and no one went into care . I worked part time as I had to support myself and my family , when it was just my mum left I had no option other than give up work and become her full time carer , and when she passed I have since looked after my grandchildren so that my daughters can work .
      How dare there be a suggestion of “ means testing “ my long awaited pension . I’ve worked all my life and paid all my contributions , any assets I have are from sheer hard work , I don’t smoke , drink or take drugs .. I will be dammed if someone tries to take away what I have more than paid enough into .

    14. What has he done for our 1950’s born women who have NO INCOME to live on despite food and fuel bills going up. Where is our pension where are OUR RIGHTS to access what we have paid in for all our lives?
      Why is this issue hardly ever on the News because politics have stopped it being made into the issue it is. Why are you doing this to us??????

    15. Give us WASPI women the money this Government has Stolen Off us. Roughly between 40,000-50,000 pounds each Many of our members have been left poor or destitute and many have died unnecessarily. Give us what we paid for.

    16. I’ve noticed some people on TV saying the triple lock should be scrapped as it only benefits rich Tory voters!! Stanley Johnson for one ! The people I’ve seen calling for means testing the pension are young well off TV presenters who moan they cannot buy a house. And an ex lib dem politition who has a gold plated pension. These young people new to remember they are going to be pensioners one day. If they are lucky. We paid for my parents generation, now it’s the turn of the youngster to pay for mine. After all we all paid in. I’ve paid nics for 50 yrs. From 15yrs to 66yrs. No generation has had pension years & money stolen off them by their own Gov like 1950s ladies. It’s disgraceful the way pensioners are treated in this country.

    17. Well put. Many people who pay National Insurance Contributions never even get to pension age. The contributions aren’t saved for each individual – the state uses them as soon as they take them. Breaking that trust that there will,be a small pension Fromm the state for everyone who has made some contribution during their working life would completely discourage millions of people from working!

    18. If any testing has to be done. Then surely the amount each individual has paid in must be taken into account. I know I have paid more than many of my friends male and female but recieve less.

    19. I have pretty much just the state pension to look forward to in 3.5 yrs. I live alone. I raised 3 professional children and so tired. I have now signed up for a counselling degree so I can continue my work with victims of domestic abuse from home when I retire. I am losing my sight so will not be driving many more yrs. Post 60 I can’t get the full student maintenance allowance that my peers get. I get one third. So I condense my 5 working days to 4 to attend uni. I study evenings and weekends and care for my 93 yr old mum grand kids etc…its too much and affecting my health. I am dyslexic and awaiting an adhd assessment. I should be able to study full time now and claim for support to do this ….please any suggestions ?

    20. I agreed with most of this article, the thing I can’t get my head around is that most women born in the 1950’s have been robbed by our ‘caring’ government of our pensions. I acknowledge I haven’t worked all of my adult life, being a woman I felt it was my moral duty to raise my children. However, once I returned to work I opted to pay full national insurance to safe guard my old age! What a joke that’s turned out to be! I expected to retire at age 60 I wasn’t aware the goal posts had been changed and I was required to work an extra six years! Thankfully, I’ve now started to receive my State Pension and now the goal posts may change again to tax our incomes! NO!! You, nor any future government, must not do this again!! Why is it always pensioners that have to carry the can for the mismanagement of N.I. Contribution Funds?? State Pension isn’t a benefit, we have paid towards our pensions! The biggest offence has been committed against women born in the 1950’s. We have been robbed pure and simple. It’s time to settle your debt, not next week, or next month or years in the future! Settle it now!!

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