Cost of Living: Pensioners

Paul Maynard Excerpts

Tuesday 16th January 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Paul Maynard)]

I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing the debate. I am always happy to meet her, as she knows. I think I have been given eight minutes to respond. Is that correct, Madam Deputy Speaker? [Interruption.] I have been misinformed. Madam Deputy Speaker, you will get more of me than I anticipated! I will do my best to respond to all the hon. Lady’s points where I can.

As the hon. Lady will of course know, we have both toured the United Kingdom looking into issues relating to poverty and visiting food banks in Hackney and Newcastle. I have toured North East Fife and thoroughly enjoyed myself, and the hon. Lady has come to Blackpool to look at the situation on the ground—an experience that I trust she enjoyed equally. I know how passionate she feels about this matter, and I hope she knows how passionate I feel about it. As I have said, I shall be more than happy to meet her. She put forward so many ideas in her speech that I may not be able to do justice to them all, but I will do my best to touch on some of them in the time that is available.

The Government fully recognise the challenges facing pensioners owing to the higher cost of living, and we are committed to action that helps to alleviate levels of pensioner poverty. We have taken significant steps to ease financial pressures by providing total support of £104 billion over 2022-25 to help households with the high cost of bills. In 2023-24 we will spend more than £152 billion—5.6% of GDP—on benefits for pensioners, including £125.4 billion on the state pension alone. Tackling high inflation remains a core priority for the Government. At its peak inflation was 11.1%, but the latest Office for National Statistics data shows that we have reduced it to 3.9%, which is good news for everyone but particularly for pensioners, on whom, in my view, inflation bears down particularly hard.

We also recognise the exceptional circumstances of the last two years and have committed ourselves to providing timely relief for those who need it most. That has been especially important following the inflationary pressures. We have provided one of the largest support packages in Europe, including two rounds of cost of living payments. More than 8 million UK households receiving means-tested benefits for which they are eligible, including an estimated 1.4 million pensioner households, may receive additional cost of living payments totalling up to £900 in the current financial year, and 8.9 million pensioner households across the UK will have received an additional £300 cost of living payment this winter as a top-up to their winter fuel payment, worth a total of £4.8 billion.

The Government remain committed to ensuring that older people can live with the dignity and respect they deserve. When I was a Member of Parliament in the coalition, we achieved many things, and to put it bluntly, I happen to think that the Conservatives have a good record as well. I will not get into a fight over whose idea was what when, and who first made the comment when, because I do not think that that would do much credit to the joint endeavours on which we are engaged, but we have stuck with the triple lock. The state pension will increase by 8.5% in April 2024, following the 10.1% increase in April 2023, and the standard minimum guarantee in pension credit will also increase by 8.5%. Like the hon. Lady, I often meet Steve Webb and listen carefully to what he says; he is a wise man indeed.

The hon. Lady focused a great deal on pension credit, as do I, for that matter. It provides invaluable financial support for about 1.4 million households claiming about £5.4 billion. The hon. Lady is right: the latest figures suggest that take-up is 63%, although they are based on cohort estimates, so they are not quite as accurate I would like them to be. Unfortunately, it is often hard to identify actual take-up; that, I think, is one of the deficits of our data system. However, take-up of the guarantee credit element, which is perhaps the main safety net, is at 70%.

I believe we can always do more. In benefit circles, we talk about stock and flow. The new pensioners flowing on to the system need an approach that will ensure that they are signposted speedily, and at an early stage, to the existence of pension credit and the question of whether it is right for them, but in recent years we have been trying to focus on the stock, not least through the advertising campaigns to which the hon. Lady referred. I am sad that Harry Redknapp did not get a mention, given the fantastic video that we put out on social media. As the hon. Lady said, we have also been considering more targeted efforts, including writing to housing benefit claimants. There has been an important trial run, but I do not have the results yet. I want them yesterday because I think they are so important, but I also want to ensure that the data is validated properly and actually means something, so that decisions based on it can then be made.

However, the work we have done already has improved uptake. The quarterly caseload statistics show a rise in the number of households in receipt of pension credit, after about 12 years of the caseload being in decline. I cannot say that that is entirely due to our campaign; Martin Lewis can probably take a share of the acclaim following his ITV series this year. I entirely agree that there are much more creative things that we can do, and we can discuss some of those ideas during our meeting when we get around to it.

The hon. Lady made a point about topping up national insurance and the issues around that. We are looking at introducing online services that will allow people to make their own payments for voluntary national insurance contributions directly to HMRC. I heard the point she made around receipting and the proper provisioning of the service, and she was quite right to do that. That will be uppermost in my mind as we go forward.

I could talk for half an hour on the gender pensions gap, although I am not sure that I have that much time. We all know that the pension gap is there, and part of the reason why auto-enrolment was introduced was to try to address that pension gap over time. In 2012, 40% of eligible women were participating in a workplace pension; 10 years on, that has increased to 86%. That shows that auto-enrolment has been a great success, but in my view it is a work in progress. There are still groups in society who are under-saving, even among those participating in auto-enrolment, and women and those with caring responsibilities are at the forefront of my mind. The hon. Lady might have seen a report by Scottish Widows back in November that identified those issues. I have had multiple discussions within my Department on what we are going to do about each particular group, so that is of particular interest to me as well.

My other point relates to pensioner poverty and poverty indicators, and I suspect we could argue about this until the cows come home. The latest statistics show that in 2021-22 there were 200,000 fewer pensioners in absolute poverty after housing costs than there were in 2009-10. Average pensioner incomes are growing in real terms, and in 2021-22 the average net income of all pensioners was £349 per week after housing costs, compared with £335 in 2009-10. As I have outlined, the Government take the cost of living pressures facing pensioners and pensioner poverty extremely seriously.

The amount we are spending is clear, but I recognise that the task will never end. The hon. Lady is quite right about that, and I think the hon. Member for Strangford (Jim Shannon) mentioned it as well. She and I discovered this on our tours around the country. She will have been sick of hearing me talk about trying to identify people upstream, as soon as something occurs, when the state can intervene and help them, rather than waiting for issues to accumulate further down the track, where the cost to the public purse is that much higher. That is very much the spirit in which I have embarked on this particular part of my ministerial journey. Many of the questions the hon. Lady raised are the questions that I have been raising in my introductory meetings, and I am now getting a chance to put some of the ideas into practice. When she and I meet, I will be in listening mode and I look forward to hearing more about some of her ideas.

Question put and agreed to.