Chancellor’s State Pension Guarantee Is “Virtually Worthless”
May 14, 2009
The NPC has calculated that the proposed 2.5% increase will give a rise next April of £2.40 a week – with millions of older women getting just £1.45. The Convention believes this will do little to tackle rising pensioner poverty, fuel poverty and the impact that the recession is having on older savers.
Dot Gibson, NPC general secretary said: “Mr Darling’s proposed 2.5% rise in the state pension next year fails to address the pressures older people face now from the economic crisis. One in four pensioners still live in poverty and rising costs of food and fuel, combined with record lows in savings returns and underperforming pensions, mean that pensioners are suffering a disproportionate increase in the cost of living. In light of all this, the Chancellor’s promise to raise the state pension next year by just £2.40 a week sounds more like an insult.”
“Millions of older people have lost money from their savings. This generation has tried to put money aside for a rainy day – but no-one warned them of an economic monsoon. Extending the scope of the means-tested Pension Credit is not the answer. A better way to boost the economy and help all older people would be to raise the state pension to around £165 a week.”
“One in three pensioners is estimated to be spending more than 10% of their income on energy bills, placing them in fuel poverty, and the winter fuel allowance now covers just a fifth of the average bill, compared to a third when it was first introduced. The Chancellor’s decision not to raise it will do nothing to prevent a further 20,000 pensioners dying this winter from the cold.”
“It’s clear that the message to pensioners from today’s Budget is stop counting your savings, don’t turn up your heating, and if you make it to next April, make sure you don’t spend your extra £2.40 all at once.”
Pensioner facts and figures
• Around 5m older people who have modest savings of around £10,000 have lost between £10 and £20 a week (up to as much as £1000 a year) as a result of the drop in interest rates.
• The scale of pensioner poverty is rising - 822 pensioners fell into poverty every day last year. 2.5m older people now live below the official poverty line. Means-tested benefits fail to reach almost 2m of the poorest pensioners.
• Older people face annual inflation rates around ten times higher than the rest of the population, according to a recent report by the Institute of Fiscal Studies. Pensioners spend a larger proportion of their income on those items whose prices are rising fastest.
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