‘Meagre’ €12 hike in pension ‘will do little to ease poverty’
THE ‘meagre’ €12 increase to the State pension will do little to reduce the risk of older people falling into poverty, say retirees.
Active Retirement Ireland is calling on the Government to deliver a State pension linked to wage growth, which would allow older people to live with ‘dignity and greater income security’.
Active Retirement Ireland (ARI) chief Maureen Kavanagh said: ‘When the €12 increase to the State pension was announced last October it was not enough, and now that it is finally in effect, it is still not enough. The simple fact is the State pension is not keeping pace with inflation.
‘The additional €12... is not an increase, rather it is a brace to slow the ever-weakening buying power of the pension year-on-year. When you consider that this money will be instantly absorbed by higher
‘Still €40 per week short’
costs of basic goods and services – and straight back into the strong economy older people are being locked out of – this meagre, so-called “increase” is actually zero, if it is not in minus.’
Ms Kavanagh said that the ‘freezing start to 2024’ means older people need the heating on more. She added: ‘The cost of postage stamps is going up, private health insurance premiums are set to rise significantly, gas and electricity prices remain at twice 2019 levels, and the cost of groceries is up 20% from 2022.’
The current pension rate is €277.30 per week for the contributory State pension at the full rate, and €266 per week with 48 years of PRSI contributions for the non-contributory State pension, which rises to €276 for people aged over 80. Only two-thirds of recipients receive the full rate.
Following the budget in October, an ARI survey of members found just over one in ten (11%) felt the €12 per week increase would give them more freedom to enjoy a better quality of life.
More than a third (35%) said the increase would not alleviate any pressure in meeting basic living costs and, when asked what the additional €12 a week would cover, more than two thirds (69%) said it would go towards paying for essentials such as heating.
‘Wages increase to keep pace with the cost of living, why is it that the pension does not?’ Ms Kavanagh said. ‘We and our partners in the Pension Promise Campaign have repeatedly called for an adequate, benchmarked State pension that is indexed to wage growth in Ireland, and we are the only country within the eurozone that doesn’t do this.
‘It is time for the Government to benchmark the State pension at 34% of average earnings... 34% is the figure the Government deemed necessary to deliver basic pension adequacy and which the Government committed to in 2018 but have still not delivered on... Even with the €12 increase, the full State pension is still €40 per week short of this figure.’
ARI’s members were asked in October what difference a pension increase of €40 per week would make. The ARI said: ‘A key theme among respondents was increased financial security and peace of mind, with one in five members surveyed saying that the additional income would mean less worry.’
A member from Co. Laois said: ‘It would make a huge difference. I could get my hair done, and not have to worry so much. Everything is so worrying all the time to make ends meet. I skip dinner most days.’ christian.mccashin@dailymail.ie