State pensioners set for rise of 38p a day

Miserly increase on way...as fuel and food bills soar

BRITAIN’S 13million State pensioners will receive a rise of just 38p a day next year, experts warned yesterday.

The £2.69 a week increase from April would be triggered under rules linking pensions to the previous September’s inflation figure, which has fallen to its lowest rate for nearly three years,

The news will pile further misery on the elderly at a time when their incomes are being severely squeezed.

In recent days, some of the country’s biggest energy giants have revealed plans to increase their prices, with the average dual-fuel bill set to jump to £1,300 a year.

Food prices are also rising, and predicted to rise further, forcing many older people to make drastic cutbacks.

Dot Gibson, general secretary of the National Pensioners Convention, said: ‘It will only add to the hardship that millions of Britain’s pensioners already face.

‘They have to cope with one of the least adequate State pensions in Europe. It is time we had a pension system that took all older people out of poverty.’

Under the Government’s rules, the increase in the State pension is linked to the inflation rate from the previous September. These figures, published yesterday by the Office for National Statistics, show the consumer price index measure of inflation fell to 2.2 per cent last month.

Under a so-called ‘triple lock’ system introduced by the Coalition, the annual increase is linked to earnings, inflation or 2.5 per cent, whichever is highest. This year, a 2.5 per cent rise is expected, although this will not be officially confirmed until the Chancellor’s Autumn Statement in December.

The rule was introduced to protect pensioners from paltry increases, such as the infamous 75p a week rise in 2000 which provoked outrage. In April this year, the State pension jumped by £5.30 to £107.45, the biggest rise since it was introduced in 1908. Yesterday, a Department for Work and Pensions spokesman said: ‘Decisions on uprating will be announced later this year.’

Dr Ros Altmann, director general of Saga, which focuses on the needs of the over-50s, said: ‘Many pensioners will be struggling to meet the basic cost of living over the next year.’

Vince Smith Hughes, a retirement expert at insurance firm Prudential, said: ‘Pensioners typically spend a higher proportion of their income on fuel and other essentials. This can result in inflation costing pensioners around £1,000 per year more than the rest of the population.’

The Department for Work and Pensions has said that the basic State pension will cost around £63billion this year.

Last month, official figures revealed that the bill would double over the next 20 years. By 2032/33, the cost will be £121billion and the number of recipients will rise from 13million today to 15.6million.