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Pensioners warn ministers over pressure to scrap triple lock pensions | Retirement | Finance

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Jonathan Ashworth calls for return of pension triple lock

Chancellor Rishi Sunak defended the expected 10 per cent hike and insisted it’s going to not fuel an inflationary spiral.

The Chancellor has come under pressure to not scrap the triple-lock again (Image: GETTY)

But critics said the move is “ludicrous” and “crazy” when wages are lagging well behind the fee of living and the federal government is asking for pay restraint.

Silver Voices director Dennis Reed warned he feared the row is pitting employees against pensioners and can result in pressure for the triple lock to be suspended again.

He said claims pensioners are in line for an additional £1,000 were wide of the mark as thousands and thousands of older claimants are still on the old lower paid system, which might mean a ten per cent hike equated to an additional £14 per week.

The brand new basic state pension, available to those retiring after April 6, 2016, is paid at a better rate of £185.15.

Mr Reed said: “If the triple lock is dropped again, hell may have no fury just like the wrath of older people.

He warned the row about pension increases at a time of pay restraint gives the federal government a “ready-made excuse” to drop the rise nearer the time.

Mr Reed warned the anger directed at the federal government last yr when the triple lock was suspended was “minor” in comparison with the “major attack” it’s going to face if it did it again.

The formula means pensions rise by the very best of inflation, pay growth or 2.5 per cent

It was suspended ahead of this yr’s increase after the pandemic skewed the figures.

Next April’s pension increase will likely be determined by the speed of inflation in September, which is currently expected to be around 10 per cent.

It has led to claims it’s unfair on younger employees to ask them to endure pay restraint while pensioners are in line for a major increase.

Downing Street yesterday insisted it could be “reckless” to lift public sector pay according to inflation.

The Prime Minister’s official spokesman warned against “chasing inflation” that would have a “larger impact” on take-home pay in the long run.

Mr Sunak argued that state pensions is not going to have the identical impact on inflation.

The Chancellor said the triple lock protects pensioners “because they’re amongst essentially the most vulnerable in our society”.

He added: “It’s right that we reward our hard-working public sector employees with a pay rise, but that should be proportionate and balanced with the necessity to not make the inflationary pressures worse and in addition to see what’s inexpensive for the taxpayer.

“The slight difference with pensions is that pensions are usually not input costs into the fee of manufacturing goods and services that all of us eat, in order that they don’t add to inflation in the identical way.”

Former Treasury minister Lord O’Neill, who served under David Cameron and Theresa May, hit out on the plans to revive the triple lock.

Lord O'Neill

Lord O’Neill is just not a fan of restoring the triple-lock (Image: Wikipedia)

He said: “Given the pressure on fiscal policy and the inequality issues for the past decade and beyond, the constant protection of pensioners seems ludicrous in itself and in these circumstances particularly crazy.”

Len Shackleton, labour market expert at free market think tank the Institute of Economic Affairs, said the cash going into the pension hike could be higher targeted elsewhere.

He said: “It’s difficult to call for wage restraint among the many working age population while pensioners receive a giant increase.

“It might be difficult politically to renege on the triple lock again, but we must always keep in mind that pensioners as a gaggle are less prone to be in poverty than, say, families with young children.

“Support for struggling households could possibly be higher targeted than giving all pensioners, a lot of whom are relatively well-off, a giant increase.”

Older pensioners often face much higher heating costs than employees out of the house for a lot of the day.

Work and Pensions Secretary Therese Coffey said the federal government has focused on helping low and stuck income households.

“We’re conscious that energy bills are rising and we don’t want any pensioner to be within the situation where they’re fearful about paying their heating bill.”

Lord Foulkes, Co-Chair of the All-Party Parliamentary Group for Older People, said: “There are some mischief makers who are attempting to begin an inter-generational fight between poor pensioners and poor families.

“This have to be resisted as each groups are struggling to make ends meet while the wealthy are getting richer by the day.

“Older people have already lost out with no triple lock this yr and must not be made to fall further behind into misery and even destitution within the worst cases.

“Additionally it is nonsense to attempt to argue it’s going to fuel inflation as they need the rise urgently to assist pay for food and fuel to maintain warm and survive and can still be buying the most affordable available own brands where possible.”

Caroline Abrahams, charity director at Age UK, said: “Tens of millions of older people, like many others across the UK, are facing an enormous financial struggle in the meanwhile, unable to pay their basic bills and dreading what looks set to be a really tough winter ahead.

“With prices rising at their fastest rate in 40 years – on top of the suspension of the triple lock last yr – it’s more necessary than ever that the State Pension is increased according to inflation next yr.

“For a lot of older people living on low fixed incomes, relying solely on their State Pension and advantages, there are simply no more cuts to make – without the protection net of the triple lock, thousands and thousands of vulnerable older people could fall into deep hardship from which they might never get better.”

Deputy Prime Minister Dominic Raab said pensioners were “particularly vulnerable they usually are disproportionately affected” by the rise in energy costs.

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