PENSION SHOCK FOR MILLIONS
Rishi hints at breaking triple-lock pledge and blocking bumper payouts
RISHI Sunak has been warned it would be an “outrage” to block a guaranteed bumper pension payout. The Chancellor, left, hinted an eight per cent rise under the triple lock pledge was at risk, to be “fair” to working taxpayers. But campaigners said more than two million pensioners were already in poverty and claimed that the Government was using the pandemic as an excuse for ditching its manifesto promise.
An eight per cent increase would hand an extra £14 a week to those on the new state pension and around £10 for the old
version. Caroline Abrahams, charity director at Age UK, said the state pension is “hardly a fortune” at far less than £10,000 a year: “Too many pensioners still worry about how they would manage if an unexpected big bill came along.”
She said rising pensioner poverty affects more than two million so a big pension rise would help.
“While older people we speak to are generally keen to do their bit to help as the pandemic continues, they are also wary of unscrupulous policymakers who might want to use exceptional times as a reason to make permanent changes – a Government sleight of hand that would not be acceptable.” Labour’s Lord Foulkes, a champion for the elderly, said: “It would be an outrage if older people who have suffered most during the pandemic had to bear the cost of the recovery. This would be another broken promise.”
Pensions go up by at least the inflation rate in September, by earnings growth or by a minimum of 2.5 per cent – whichever is the largest.
But the Covid crisis is expected to skew calculations this year as average earnings rose 5.6 per cent from February to April and are likely to rise again.The figures are high compared with a year ago as wages were depressed while many workers were furloughed or paid less.
Eight per cent would cost at least £3 billion above the extra £2.5 billion the Treasury had budgeted for.
Former pensions minister Sir Steve Webb predicted Mr Sunak will announce the move just ahead of the November budget.
He warned: “We still have a poor state pension and it is particularly important for women. Anything we do to take our foot off the gas on the state pension is overwhelmingly damaging women’s pensions.”
Dennis Reed, director of Silver Voices, said: “Pausing the triple lock would be a triple whammy for older people, after the scrapping of free TV licences for the over 75s and the proposed scrapping of free prescriptions for 60-65 year olds.”
Jan Shortt, of the National Pensioners Convention, said: “Let’s not be coy here – a decent state pension is affordable and the triple lock is not unfair to workers.”
The Chancellor said concerns about the country being able to afford an eight per cent pension rise from next April “are completely legitimate and fair concerns. Our approach to these things will be driven by fairness.” He also defended ending the £20 weekly rise in Universal Credit that helped families cope in the pandemic: “People understand what’s right for a crisis and what’s meant to be temporary.”
Boris Johnson echoed his pensions comments and aides said the Prime Minister was “fully committed” to the triple lock. Tory former minister Lord Willetts, president of the Resolution Foundation think tank, said the Covid jobs crisis was “inadvertently contributing to an unnecessary and unjustified eight per cent rise”.