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  1. Published on: 07/09/2021 04:34 PMReported by: editor
    While the main focus in government today has been the NHS and Social Care reforms it is also bad news for pensioners.

    The triple lock guarantee which gives pensioners the higher of:

    • Inflation rate
    • 2.5%
    • Average year on year rise on earnings


    With earnings rising 8.8% pensioners thought they were in for a bumper rise this year. Not so after today, the government have suspended wage rises from the equation for this year leaving pensions with a 2.5% increase in their state pension.

    With the increase in national insurance for NHS and Social care announced today that is two conservative manifesto pledges broken today.

    Many pensioners are subject to an average 4% rise in council tax year so this news will come as a blow.

    Many hoped that the wage increase could have been analysed over the past two years because of the variations due to covid which would have given a 4% rise.

    Statement made to the House of Commons today by Thérèse Coffey, Secretary of State at the Department for Work and Pensions

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    With permission, Madam Deputy Speaker, I will make a statement on the annual up-rating of State Pensions and survivors’ benefits in Industrial Death Benefit.

    Each year, as the Secretary of State for Work and Pensions, I am required to undertake a review of certain benefit and pension rates in relation to the general level of earnings.

    And just as happened last year, this year I anticipate an unusual change in earnings due to the effects of the Covid pandemic. The unprecedented but necessary COVID restrictions we introduced last year protected lives, especially the most vulnerable, many of whom are pensioners, and protected the NHS. But these restrictions caused disruption to the economy, including preventing many people from working, wages falling and sadly many people being made redundant.

    As we sought to protect lives, so we sought to protect livelihoods. And to mitigate the worst impacts, we introduced a £407 billion 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% as this was higher than inflation. If we had not done this, State Pension would have been frozen. Thanks to our vaccination programme which started with the eldest and most vulnerable in our society, we have seen that as the economy and businesses have reopened and millions have moved off furlough and returned to work, the labour market has shown strong signs of recovery and earnings have risen at an unprecedented rate and we face a distorted reflection of earnings growth.

    The latest ONS figures from August show an increase in average weekly earnings of 8.8%, compared to the same time last year. Confirmed figures will be published next month, but we expect growth of 8% or more for May to July 2021 – the relevant period earnings are taken into account as part of my uprating review.

    This year, as restrictions have lifted and we experienced an irregular statistical spike in earnings over the uprating review period, I am clear that another one-year adjustment is needed.

    So tomorrow, I will introduce The Social Security (Up-rating of Benefits) Bill. For 2022/23 only, it will ensure the basic and new State Pensions increase by 2.5% or in line with inflation, which is expected to be the higher figure this year. And as happened last year, it will again set aside the earnings element for 2022/23, before being restored for the remainder of this Parliament.

    This will ensure pensioners’ spending power is preserved and protected from higher costs of living. But it will also ensure that as we are having to make difficult decisions elsewhere across public spending – including freezing public sector pay – pensioners are not unfairly benefitting from a statistical anomaly.

    At a time when we have made tough decisions to restore the public finances which have impacted working people – such as freezing income tax personal thresholds at current levels – this would not be fair. Setting aside the earnings element is temporary and only for one year. This means 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. While the earnings growth is a welcome sign of the country’s overall economic recovery, given the unique and exceptional events of the past 18 months, this year’s measure is being skewed and distorted, reflecting a technical and temporary period of reverting or rebounding earnings – the differing cohorts of people who were retained or made redundant.

    As a result, the earnings measure is a statistical anomaly and is not a ‘real life’ basis for considering this year’s uprating of State Pensions.

    As other commentators have said, for example, the Institute for Government: “The figure for earnings growth is distorted… the increase is artificially high because so many workers were furloughed last year”. The Social Market foundation also endorses my proposal stating: ‘The Triple Lock should be replaced with a double lock…pensions would still rise, but less quickly, reducing the fiscal burden on the working-age population’.

    In addition to those receiving basic and new State Pensions, this will apply to those receiving Standard Minimum Guarantee in Pension Credit and widows’ and widowers’ benefits in Industrial Death Benefit. The Bill will not extend to other benefits which are linked to prices, which I will review under the existing legislation, as I did last year.

    Madam Deputy Speaker, this government is committed to ensuring that older people can enjoy their retirement with security, dignity and respect – and that those who have worked hard and put in for decades can be confident that the state will be there to support them when they need it.

    Since 2010, the full yearly basic State Pension has increased by over £2,050 in cash terms. There are also 200,000 fewer pensioners in absolute poverty – both before and after housing costs – than in 2009/10.

    I am proud of our record on support for pensioners and of the action we took last year to ensure that pensioners’ incomes continued to increase, despite falling earnings among working-age taxpayers.

    Our recovery is based on the principles of fairness and sustainability as we level up opportunities across the country, invest in jobs, skills and public services, while repairing the public finances.

    This is the fair and reasonable course of action given the temporary statistical anomalies in earnings we have seen this year as a result of unprecedented interventions in the economy and the labour market.

    I commend this statement to the House.

    Useful links: Report Cyber Crime | Stop Nuisance Calls & Mail | Daily Covid Stats (updated 4pm) | Covid excess deaths in your area | Local NHS Resources | What 3 Words





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    Your Comments:


  3. steve says:07/09/2021 05:14 PM
    I've written to my conservative MP about this. Surely they could have done an average of the last two exceptional years and made a 4% rise for pensioners. The same as the rise in council tax. Lost my vote!!!!

  4. Likes Nash, town36 liked this post
  5. donkey22 says:07/09/2021 09:58 PM
    Saw this earlier on Twitter.
    “Absolutely delighted to be paying more in National Insurance to look after millionaire pensioners who stole my EU citizenship. Just ecstatic.”

  6. Likes Toodles McGinty liked this post
    Dislikes town36, Billd, Ormyboy disliked this post
  7. silver fox says:08/09/2021 07:27 AM
    Quote Originally Posted by donkey22 View Post
    Saw this earlier on Twitter.
    “Absolutely delighted to be paying more in National Insurance to look after millionaire pensioners who stole my EU citizenship. Just ecstatic.”
    Using a big brush there, I’m a pensioner, far from a millionaire and I didn’t vote for Brexit, would love to meet a millionaire pensioner, don’t doubt they exist, but would imagine pretty thin on the ground.

  8. Likes Ormyboy liked this post
  9. Lawrence says:08/09/2021 09:25 AM
    Two votes lost from this pensioner household
    Have emailed Damion to that effect

  10. Likes steve liked this post
  11. steve says:08/09/2021 11:09 AM
    Good luck to any millionaire pensioners who will be paying more tax than what they get as a state pension.

    Pensioners got screwed over the increase in age, especially for women, and now this.

    I've not had a response after writing to my MP last night.

    Could see hardly any mention of this on front pages today - except for the Daily Star

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  12. donkey22 says:08/09/2021 03:11 PM
    Quote Originally Posted by silver fox View Post
    Using a big brush there, I’m a pensioner, far from a millionaire and I didn’t vote for Brexit, would love to meet a millionaire pensioner, don’t doubt they exist, but would imagine pretty thin on the ground.
    Absolutely no offence intended. Just made me smile.


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