Cost of Living Increases: Pensioners

Claudia Webbe Excerpts

Monday 21st March 2022 Commons Chamber

[Claudia Webbe (Leicester East) (Ind)]

Older people and pensioners are being disproportionately affected by the Government’s cost of living crisis. Office for National Statistics research shows that pensioner households are having to spend more per week than other age groups. With the energy price cap increasing and protections decreasing, a typical pensioner household’s bills will be fourfold what they were, just to keep warm. The ONS also found that a higher proportion of older people live in the least energy-efficient houses.

In September 2021, the Government announced that they intended to remove the earnings link to the state pension triple lock and downgrade to a double lock of prices or 2.5%, as they say they are unwilling to increase the state pension given the economic pressures of the pandemic being felt by other sectors of society. Today the Government say there will be no U-turn. They should properly clarify their position; they should commit to the triple lock now—not next year, now.

The Government uprated the state pension this April by 3.1%, less than half the forecast rate of inflation for this year. For an individual in receipt of the full state pension the reduction is nearly £400 a year in real terms. Rather than levelling down the state pension due to the cost of living crisis that they themselves are responsible for, the Government should abandon their zero-sum economic mindset, reinstate the triple lock and level up their economic support to all demographics, including full restitution to women born in the 1950s who have lost their pensions from the age of 60. And of course all of this should be funded through taxation on corporations and the super-rich.

From the 2023-24 financial year, around 1.3 million working pensioners will be asked to pay the health and social care levy, a 1.25% tax hike. Across the UK, there are around 1.3 million working pensioners who could face paying the levy, including 91,100 in the east midlands. This Government only raise funds by squeezing the struggling many, while allowing the astronomical wealth of the few to grow continually. The Government should scrap the national insurance hike and replace it with a wealth tax. Shamefully, after 12 years of Conservative government, there are half a million more pensioners living in poverty; the figure increased from 1.65 million in 2010 to over 2.1 million in 2020. The rate of pensioner poverty rose from 14% in 2010 to over 18% in the year before the pandemic. Age UK has also warned that an estimated 150,000 additional pensioner households are likely to be pushed into fuel poverty this winter, taking the number of fuel-poor older households to over 1.1 million this spring.

It is intolerable that the Government have presided over the normalisation of widespread pensioner poverty. They must act now to end the cost of living crisis and prevent the further impoverishment of older people and pensioners.