Social Security Benefits Up-rating Order 2024

Lord Davies of Brixton Excerpts

Tuesday 27th February 2024 Grand Committee

In conclusion, I have raised the question of benefit adequacy every year in which I have participated in these uprating debates. It is encouraging that it is no longer a niche issue, but the Government have yet to acknowledge the case for a review of benefits adequacy and restrictions. I just hope that they or a future Government will do so; otherwise, we will continue, in future uprating debates, to wring our hands over the hardship experienced by too many of our fellow citizens.

[Lord Davies of Brixton (Lab)]

It is a great pleasure to follow my noble friend Lady Lister of Burtersett. In her usual meticulous manner, she made a series of detailed points. I will just make a couple of relatively straightforward points on pensions.

There is a touch of unreality about this discussion, because I received notification of my increased state pension last week and there was nothing in there to suggest that it was subject to any further parliamentary process. Should we vote it down today, my hopes based on the notification that I had from the noble Lord’s department will be shattered. However, I suspect that we are not going to turn this down today.

I have two points. First, a lot of the coverage of this increase said that state pensions would be increased by 8.5%. I discovered that it was not actually 8.5% and might be something else only from reading the small print. The press are mainly at fault for that. I found no significant story in a national paper explaining the distinction between the 8.5% increase for the new and basic state pensions and the 6.7% for everything else.

The everything else is not trivial: it is all the additional pensions that people earned while they were in the state second pension, the retained rights that they received when the new state pension was introduced and the additional pensions that people gained because they deferred their state pension. A particular surprise to me was the 10% increase that pre-2016 retirees receive. The additional pension, the 10%, is increased by only the lower figure rather than, as I would have logically thought, the higher figure. It includes the graduated retirement pension from the Boyd-Carpenter scheme. So significant amounts are increasing and, I dare say, by only 6.5%. I say “only” because that reflects the rate of inflation. I think saying it is increasing only in line with inflation is a fair assessment of the situation.

To a certain extent, it is the fault of the press, but I think the department has a responsibility to produce greater clarity on this issue. In moving these regulations in the Commons, the Parliamentary Under-Secretary for Work and Pensions said:

“The draft order will increase relevant state pension rates by 8.5%, in line with the growth in average earnings in the year to July 2023. It will also increase most other benefit rates by 6.7%”.—[Official Report, Commons, 31/1/24; col. 929.]


To the non-expert observer, I am sure that would suggest that all the state pension was going to increase by 8.5%, and I suggest that that was reflected in the press coverage. However, I defy the department to produce a single person whose entire benefit is just the new state pension or the basic state pension. People are bound to have some other increases, even if it is only the graduated pension scheme, so no one gets 8.7%. I thought at one stage I was going to tell the Committee what my increase was, but then I realised that with a simple bit of algebra noble Lords could work out what my state pension is, and I do not want to mention it in this debate.

Look at what the Chancellor of the Exchequer said about the Autumn Statement when he announced these increases:

“The government will … continue to protect pensioner incomes by maintaining the Triple Lock and uprating the basic State Pension, new State Pension and Pension Credit standard minimum guarantee for 2024-25 in line with average earnings growth of 8.5%”.


There is no mention that there is this large chunk of pension that will be increased only in line with inflation. It annoys me each time, and Members of the Committee have been the recipients of my annoyance on this occasion.

The other point I wish to raise has already been raised by my noble friend Lady Lister—the delay in payment. I spoke about this at some length last year, and it has not changed, but I thought that on this occasion it is worth quoting, as my noble friend mentioned, Nigel Mills MP speaking in the Commons. He is chair of the All-Party Parliamentary Group on Pensions. He described it as a “crazy process” and said:

“We have to use September’s inflation for an April increase in benefits, and we have to have an uprating order quite a while after the Chancellor has announced it in the Budget. The Work and Pensions Committee recommended that the Government bring these orders before the House earlier than February, so I commend the Government—we are still in January”.—[Official Report, Commons, 31/1/24; col. 932.]


So down the other end they got it in January, but we did not get it until February and the important point is that pensioners will not get the increase until April. That system of a September/autumn announcement and April increases has, in effect, subsisted for 40 years despite all the developments in maintaining records and the computerisation of systems.

I was glad to hear my noble friend suggest that some further thought is being given to this. In the interim it would be reasonable, to the extent that the effect of the increase could be from 1 January—although it is not possible to start the payment until April, because of the systems—for us to give the underpayment for the first three months of the year as a lump sum, at the beginning of April. I think that everyone would love to receive that.