Cut in pensions ‘to spell poverty for thousands’

THOUSANDS OF older people in Yorkshire will be pushed into poverty after the “biggest realterms cut to the pension in 50 years”, Shadow Work and Pensions Secretary Jonathan Ashworth has warned.

Speaking on a visit to Sheffield, Mr Ashworth called on local Tory MPs to put pressure on Chancellor Rishi Sunak to rethink the situation.

He said: “Rishi Sunak and Boris Johnson broke their promise to pensioners on the triple lock.

“We’ve now got the biggest realterms cut to the pension in 50 years. This is a staggering, severe cut and when you think about 500,000 pensioners across Yorkshire that is going to cause huge damage.

“Pensioners are really going to struggle.”

The Government has suspended the earnings element of the pensions triple lock for 2022/23, meaning pensions are increasing this month by 3.1 per cent – well below the rate of inflation, which the Bank of England expects to hit 7.25 per cent this month.

Recent analysis by Telegraph Money and wealth manager Quilter said the discrepancy represented

the biggest real-terms fall in pensions since 1980, when inflation was 21.8 per cent and the pension was then increased by just 16.5 per cent.

While the state pension is rising by £5.55 a week this month, there will effectively be a real-terms cut of £7.45 per week – £388 for the year.

The Government has said it “remains committed” to restoring the pensions triple lock for the rest of the Parliament, saying this year’s measure was due to a “statistical anomaly” relating to Covid putting earnings increases at eight per cent.

But with inflation now running close to that level, Mr Ashworth said he was concerned that another real-terms cut could come next year as well.

He said: “The reason the pension and Universal Credit is being cut in real terms is because Rishi Sunak and Boris Johnson have pegged it to where inflation was last September.

“What you could do is say, inflation is going to be higher this year so why don’t we bring forward next year’s increase now?

“The fact Rishi Sunak didn’t do that is bewildering.

“But you could bring some of that forward to cushion people as they have to navigate these big storms that are coming.”

Mr Ashworth highlighted research from the Resolution Foundation following the Spring Statement that suggested 1.3 million Britons, including 500,000 children, are set to fall below the poverty line in the next 12 months.

“Rishi Sunak should have done something to support pensioners, families and children in Yorkshire.”