Sunak should 'step away' from pension triple lock says Gauke
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The Chancellor, left, hinted an eight percent 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 percent 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 percent – whichever is the largest.
But the Covid crisis is expected to skew calculations this year as average earnings rose 5.6 percent 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 percent 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 percent 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 percent rise”.
Comment by Jan Shortt
THE UK state pension is the most inadequate in the economically developed world.
The gap between pensions and earnings is widening, rather than pensioners being better off at the expense of younger people.
Pensioner poverty has increased with 2.1 million people on relative low incomes, before housing costs. While 1.8 million are under the absolute low-income measure of 60 per cent of the average income.
The average wage is £29,692 compared to a full state pension of £7,155.20 pre-2016 and £9,339.20 post-2016.
Not everyone has a full state pension because of breaks in contributions and not everyone has an occupational pension to fall back on. The National Pensioners Convention has been urging the Department for Work and Pensions to engage in an open, honest debate.
The triple lock is there because of a poor state pension and to combat poverty.
Rather than look at a decent state pension for everyone, the Government argues it is not sustainable.
The increase in state pension retirement age not only saves the Government money on paying out pensions, it also rakes in more in taxes and National Insurance contributions. Let’s not be coy here: a decent state pension is affordable and the triple lock is not unfair.
Rishi Sunak is allegedly thinking of “suspending” the triple lock for 2022. Can we trust him not to go further?
We don’t think so, especially at a time when other universal entitlements for pensioners are under attack.
It’s time to get round the table with us, Rishi – and down to some honest debate on the future of pensions.
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