Triple lock on state pension scrapped – here's how much you will lose...

[rebbonk]

With Johnson suffering his self inflicted problems I can see this particular 'U-turn being made in an effort to placate the electorate.

Well, let me be the first to spell it out to the useless fat womble; it won't work, it's not good enough, now pack your bags and foxtrot oscar!

[dutchman]

Nah, all he has to do is keep banging on about 'coronavirus' and everyone will forget about pensions, inflation, tax rises, unemployment, etc.

[dutchman]

Bring state pension in line with new inflation figures, ministers told



Pension increases in April should be linked to new inflation forecasts in a one-off effort to tackle the cost of living crisis, campaigners have said.

Campaigners and former pensions ministers called on the Government to step in urgently to protect elderly people, who are already facing a difficult winter of rising energy bills, after City economists revised up their inflation forecasts for this year.

They said that the annual state pension, which will increase by just 3.1 per cent in April, was based on out-of-date figures and should be revised to account for the fact that inflation is likely to peak at more than double that.

The 3.1 per cent increase is pegged to the inflation rate in September, but price rises have escalated considerably since then on the back of soaring energy prices.

Capital Economics, a research consultancy, said that the index would come in closer to seven per cent in April, which is higher than the six per cent peak forecast by the Bank of England in November. By failing to keep up with inflation, pensioners’ incomes will fall in real terms.

Sir Steve Webb, the pensions minister under David Cameron, said: “This is a one-off situation that justifies using forecasts because we knew that this year’s figures would be volatile and erratic.

“It’s no good saying to a pensioner who is sitting at home with the heating on that they will get an increase next year… and it’s not just the poorest pensioners that this affects.”

Analysis by the Institute of Fiscal Studies showed that pensioners would gain £364 a year were the change implemented. Pensioners’ incomes will rise from £179.60 per week to £185.15 in April, but a seven per cent increase would take them to £192.16.

Baroness Altmann of Tottenham, another former Cameron-era pensions minister, said: “We had a manifesto promise to protect pensioners who are now on the cusp of a cost of living crisis. It is so awful to think that we have so many pensioners now living in poverty. What are they meant to live on?”

She called on ministers to increase one-off payments to pensioners, including the warm homes discount for those on the lowing incomes, to prevent hardship and a rise in excess deaths over the winter.

Caroline Abrahams, the charity director at Age UK, said: “There's no doubt that the rapid rise in the cost of living is hitting many older people hard, with worse likely to come in the spring due to soaring energy costs, according to the experts. It is certainly open to the Government to change its mind about pausing the triple lock this year, to help pensioners to cope at this inflationary time, but there are many other options available to ministers too.”

She added: “What really matters is that they bring forward one or more really effective measures that protect older people on low and modest incomes from financial distress and all the anxiety that goes along with it, and do so quickly. Token gestures will not be enough. There’s a need to direct substantially more money to the poorest pensioners to enable them to keep their heads above water this winter.”

[dutchman]

The government knew all of that when they scrapped the triple lock so there is zero chance of them reversing it now.

[rebbonk]

I'm not pleading poverty, but my electricity bill has more than doubled over the last month.

I'm all electric (and pay monthly), but I really fear for those that pay quarterly and will be in for a nasty shock come the end of February. There are many that will be plunged deep into the red and who won't see a way out.

[dutchman]

I'm curious as to why there's a six month delay between the announcement of a pensions (and benefits) rise and it actually being paid? In the USA it takes just three months and they have many more claims to process than the UK.

[dutchman]

State pension faces biggest real-terms cut in nearly 50 years



British pensioners will suffer the biggest loss of income since 1975, as the state pension will fall by hundreds of pounds in real terms this April.

A dramatic surge in inflation and the Government’s controversial decision to break the state pensions “triple lock” will leave a £388 hole in 12 million pensioners’ pockets.

The state pension will rise by £5.55 a week in April but this 3.1pc increase is not enough to keep up with inflation, which is predicted to hit 7.25pc according to the Bank of England. This will equate to pensioners taking a real terms cut worth £7.45 a week, or £388 a year.

It represents the greatest loss of spending power in 47 years, with inflation expected to outpace the increase by more than 4 percentage points, analysis by Telegraph Money and wealth manager Quilter showed. The last time the state pension fell so much in real terms was in 1975, when inflation hit 21.7pc and the annual state payment increased by just 14.7pc.

Jon Greer, of Quilter, said this would be by far the biggest loss in spending power since the triple lock was introduced in 2010.

This comes as a further blow for pensioners who are among the most vulnerable to rising energy prices and have little protection as the cost of living crisis bites.

Someone turning 66 this year would be £9,291 out of pocket by age 85, in real terms. This is the most conservative calculation as it assumes the state pension only increases 2.5pc beyond 2022. The £388 difference between the two payments would compound over time, costing pensioners thousands of pounds in retirement benefits.

Baroness Ros Altmann, a former pensions minister, who led a campaign in the House of Lords in November to defend pensioner incomes, said the Government had ignored the warning signs and betrayed pensioners.

“Pensioners don’t seem to be anywhere on the Government’s priority list, it’s as if they don’t count and so many will struggle as a result,” she said.

Mr Greer said: “For those retirees who rely solely on the state pension for their income, this kind of reduction in the real value of their payments will hit them hard especially against a backdrop of rising food and energy prices.”

[dutchman]

I'm not affected personally but I've just noticed from my council tax statement that the personal allowance for pensioners - ie: the amount we can earn on top of the state pension before it's clawed-back from other benefits - has been reduced from around fifteen pounds a week last year to around twelve pounds a week this year.

Sunak was probably hoping nobody would notice?

[rebbonk]

I'm not affected personally but I've just noticed from my council tax statement that the personal allowance for pensioners - ie: the amount we can earn on top of the state pension before it's clawed-back from other benefits - has been reduced from around fifteen pounds a week last year to around twelve pounds a week this year.

Sunak was probably hoping nobody would notice?

Sunak (and the rest) are fools. The 'grey' vote has kept the selfservatives in power for years. Betraying that vote is going to cost them heavily.

[dutchman]

'Nothing for elderly': A 3.1% state pension hike is outstripped by inflation



Older people struggling with higher bills received no help from the Chancellor today and will be forced to bump up pension withdrawals to make ends meet, warn experts.

The lack of assistance to the elderly as the prices of essentials soar was condemned by former government ministers.

'There is no relief for pensioners, especially the poorest, who cannot work any more, due to age and infirmity,' says former Pensions Minister Ros Altmann.

'The state pension and pension credit will rise by only 3.1 per cent, while inflation has now risen to 6.2 per cent driven by rising basic living costs, and the Office for Budget Responsibility is forecasting that it will increase to 7.4 per cent in the year ahead,' she adds.

'Pensioners will have been shocked by the lack of action by the Chancellor to help with the soaring fuel bills they are about to face,' says Steve Webb, another former Pensions Minister who is now a partner at LCP.

'But the inflation forecasts suggest that a big state pension rise is likely to happen in April 2023 off the back of high inflation this year.

'With inflation in the key month of September set to be around 8 per cent based on the latest forecasts, the new state pension will break through the £10,000 barrier next year. But in the meantime pensioners will continue to face a big squeeze on their budgets.'

There is a conspicuous lack of help for pensioners in Chancellor Rishi Sunak's Spring Statement, says Jon Greer, head of retirement policy at Quilter.

The increase in the National Insurance threshold announced today will not support struggling pensioners as inflation ratchets up to 6.2 per cent, versus the 3.1 per cent rise in the state pension next month, he points out.

'Most probably won't have already been planning to install solar panels and heat pumps and many older people either don’t drive or only take short journeys, meaning the cut on fuel duty is unlikely to offer a helping hand.'

Steven Cameron, pensions director at Aegon, says: 'Pensioners received little in the way of good news from the Chancellor in his mini Budget.

'There was nothing new in the way of temporary support specifically for this group, and no improvement on the 3.1 per cent increase in the state pension from next month, which is just half the current rate of inflation.

'Added to this, those above state pension age don’t pay National Insurance on earnings so won’t benefit from the £3,000 increase in the NI threshold."

Melissa Blissett, senior consultant on pay gap analytics at Barnett Waddingham, says: 'Pensioners and those approaching retirement have been lured with "jam tomorrow" by the Chancellor.

'Some will benefit from the reduced income tax rate, and when the triple lock returns next year there is likely to be a very healthy increase in pension payments; April 2023’s increase will be based on September’s 2022 CPI figure which is set to be close to 8 per cent according to the OBR.

'A cynic might note this would be just in time for elections season. In practice though, most pensioners have been left in the dust by the Government. Tax cuts and R&D policies will go little way to protect those in retirement from the spiralling cost of living and rising fuel bills.'