Pensioners left ‘out in cold’ – disappointment at state pension as inflation set to rise
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Rishi Sunak failed to announce any additional measures today to help the elderly this winter despite their finances being squeezed more than previous years. Commentators hoped Mr Sunak would potentially increase the Winter Fuel Payment, Cold Weather Payment or the Warm Home Discount Scheme today to help pensioners and millions of people on a low income pay their bills.
Ian Browne, retirement planning expert at Quilter said the Government’s failure to announce extra help this winter following the cut to the triple-lock will leave the older generation feeling like they have been forgotten.
“The government’s refusal to increase any of the social security payments for pensioners such as the Winter Fuel Payment, Cold Weather Payment or the Warm Home Discount will come as a huge blow to millions across the UK.
“This will further add to pensioner’s anger at the government after it downgraded the triple lock causing them to miss out on a potential 8 percent increase in state pension payments.”
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Winter benefit payments are designed to help the most vulnerable in society, including pensioners, get through the colder months.
Although they are not generally increased annually, experts hoped that this year might be different.
They have been hoping that the Government would provide additional support this year to people on a low income, particularly the elderly, to help them meet rising living costs.
The Winter Fuel Payment has remained the same since 2011, despite the fact that the cost of living has increased every year.
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Mr Browne said he understood that we are in difficult economic times but he was disappointed that today’s announcement didn’t do anything to help pensioners pay their bills.
“Take the Winter Fuel Payment for example which has not changed since 2011 and is currently one annual payment of £200 if you are under 80 and £300 if you are over 80.
“These benefits are too important to be ignored and shouldn’t suffer the same fate as the Christmas bonus which has been stuck at £10 since 1972.
“We are in a fiscally difficult time and it’s clear the government needs to tighten its belt in some areas, but these social security payments continue to help the elderly keep warm and get through the winter months.
Steven Cameron, Pensions Director at Aegon said pensioners would be disappointed that the Chancellor gave no hint that the state pension would rise above inflation come April 2022.
He said: “State pensioners will be disappointed that despite the chancellor’s Budget speech emphasising an expected rise in inflation, there is no sign their increase next April will be above the 3.1 percent inflation increase based on September’s inflation outcome.
“In its original form, the triple lock formula would have produced a massive 8.3 percent increase because of furlough induced distortions to national average earnings.
“This prompted the government to announce it would move to a double lock for one year only of the higher of inflation or 2.5 percent.”
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He said that while 8.3 percent would have been extremely generous, 3.1 percent may look harsh once sharp rises in the cost of living that disproportionately affect pensioners are taken into account.
“For many, the state pension is the bedrock of their retirement income and come next April, a 3.1 percent increase may leave many feeling left out in the cold.”
The triple lock has been suspended for this year but usually means that the state pension increases each year in line with whichever is highest: inflation, average wages or 2.5 percent.
However for 2022 to 2023, Work and Pensions Secretary Therese Coffey announced the triple lock will be suspended and instead determined by either the inflation rate or 2.5 percent.
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