The state pension payment changes were announced today by Therese Coffey in the House of Commons, as the Government confirmed triple lock rules would be temporarily altered in a bid to save money. Speaking exclusively with Express.co.uk following the announcement, Dennis Reed, Director of Silver Voices, said this amounted to the Government stealing from the elderly.
Mr Reed continued: “We have given notice to the Conservatives that if they scrap the triple lock this year, we would campaign against the Conservatives at all future elections until the triple lock is restored.
“So that is now a fact and that’s what our members want, 97 percent of them voted to take this position.
“It is so important to us as it’s a guarantee that pensioner poverty won’t get worse.”
Andrew Tully, a technical director at Canada Life, also highlighted adults across the board do not support what the Government has set out.
Mr Tully said: “The Government has been walking a difficult tightrope regarding the triple lock and appears to have finally landed on a decision to remove the earnings-linked guarantee, a move that our research shows only 16 percent of adults support.
“By opting for a temporary ‘double lock’ the state pension is now likely to increase by around 2.5 percent.
“The furlough effect on earnings means that without a change the state pension would have been set to grow by around eight percent at a cost of billions of pounds in a time when public finances are increasingly stretched. It’s important to remember that each one percent rise in state pension costs the taxpayer around £850million a year.”
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While the decision may prove unpopular, many experts argue it is a crucial, if painful, step to take.
Ian Browne, a pensions expert at Quilter, said: “The writing’s been on the wall for the 2022 state pension triple lock for some time now. Rapid wage growth resulting from the end of the furlough scheme could have potentially increased state pensions by over eight percent next year.
“Defending such an increase in state pension incomes would have been a tricky message for the Government to get across after they’ve just hiked national insurance rates for workers and for employers.
“Instead, the Government has opted for a one-off tweak to the triple lock to remove the earnings link, and will uprate the state pension next year based on the higher of inflation or 2.5 percent.
“While the Prime Minister may have just come off a few pensioners’ Christmas card list, it is right that the earnings growth anomaly has been corrected.
“Besides, the triple lock was tweaked once already to ensure that pensioners received a fair deal. The Government introduced new legislation last year to ensure state pensions were uprated by 2.5 percent in recognition of their manifesto promise and commitment to pensioners – at a time when inflation was a mere 0.5 percent and earnings were falling due to the furlough scheme. Now it’s gone the other way, it’s only right that the Government reacted.
“The Bank of England’s Monetary Policy Committee estimated recently that inflation will increase temporarily to four percent in the near term.
“Assuming that CPI inflation is four percent this month, removing the earnings link will save the Government £3.6billion next year. Music to the ears of the Chancellor.”
Becky O’Connor, the Head of Pensions and Savings at interactive investor, shared similar sentiment: “The state pension triple lock guarantee is no longer guaranteed – it is to go double, but only for a single year, before returning to the manifesto-pledged triple lock.
“The forthcoming state pension rise is therefore set to be in line with inflation.
“This should be an outcome that suits both pensioners, who depend on adequate rises, as well as critics who were concerned that a higher than justified rise was on the cards for pensioners, following a year of anomalous wage data.
“It’s important that the Government follows through with the commitment to reinstate the triple lock, as the earnings measure, in normal times, helps to ensure pensioner incomes do not fall below those of the rest of the population.”
In addressing the suspension, Thérèse Coffey, the Secretary of State at the Department for Work, reiterated its temporary nature.
Dr Coffey confirmed the new Social Security (Up-rating of Benefits) bill would ensure the new and basic state pensions will still increase by 2.5 percent or by the rate of inflation, meaning pensioners would still get a boost and increases will not be scrapped entirely.
“As happened last year, it will again set aside the earnings element for 2022/23 before being restored for the remainder of this Parliament,” she said.
“As we have sought to protect lives, so we sought to protect livelihoods and to mitigate the worst impacts we introduced a £407billion package of support including the furlough and self-employment schemes to support incomes.
“Nevertheless last year we saw earnings fall by one percentage point. In response we legislated to set aside the earnings link allowing me to award an uprating of 2.5 percent as this was higher than inflation.
“If we had not done this, the state pension would have been frozen.
“We can and will apply the triple lock as usual from next year for the remainder of this Parliament, in line with our manifesto commitment.”