When it was announced earlier this month that the government would be scrapping the triple lock on pensions for one year, work and pensions secretary Therese Coffey described the U-turn as “fair and reasonable”. But with 2.1 million older people now living in poverty, charities fear that suspending the pension protection pledge will exacerbate pensioner poverty.
The triple lock, put in place by the coalition government in 2010, promised to protect the value of the State Pension for pensioners, both current and future. This was to be achieved by increasing the pension year on year in line with whichever is the highest out of:
Inflation (measured by the Consumer Prices Index)
Average wage increase
2.5%
This promise was over-turned this September when Parliament opted to suspend the scheme for one year from April 2022. In its place? The Social Security Uprating of Benefits Bill. The difference? Taking the average wage increase out of the equation in the calculation of the yearly increase.
Coffey argues this change is necessary given the “irregular statistical spike” in wages which has followed the job losses and salary cuts during COVID-19 in 2020. The recent surge in wages as the economy recovers would have qualified pensioners for an 8% rise in pensions under the triple lock.
Whilst Helen Morrissey, senior pension and retirement analyst, agrees that this move is “fair” to taxpayers and pensioners alike, SNP work and pensions spokesman David Linden describes the Tories as "waging war on pensioners' incomes by watering down the triple lock."
This news comes as Age UK publishes frightening statistics in their latest poverty report. Shockingly, one in five single female pensioners – around 1.25 million people – now live below the breadline. This has risen by 6% in under a decade, despite the increase in female state pension age.
For pensioners from BAME backgrounds, the poverty figure is as high as one in three. This damning statistic also “demonstrates a level of structural inequality in our society, linked to race” that Age UK Charity Director Caroline Abrahams believes “should be a wake-up call for both national and local policymakers."
With around 2.1 million pensioners in poverty making difficult choices between using less heating and consuming less food, Age UK is calling for “a clear reform programme, in partnership with third sector organisations". With the suspension of the triple lock, we appear to be a long way off any such commitment to reform and combat pensioner poverty.
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