The 10 per cent rise in State Pensions was the right move - Ros Altmann

In the middle of a cost of living crisis, pensioners were abandoned last year. Especially as the UK state pension is the lowest in the developed world, prioritising inflation increases should have been axiomatic. Yet, the triple lock promise of protection against rising prices or earnings was broken last year. Wages had risen by over 8 per cent but pensioners had to manage on just 3.1 per cent.

There are, of course, many pensioners who have plenty of income or other assets to supplement their state pension. Over £50bn a year is also spent on incentives for private pensions too, which are supposed to supplement the minimal state payment – that is how our national insurance welfare state has always been supposed to work.

However, today’s pensioners did not all have the chance to build private pensions when they were younger, so they are totally dependent on the national insurance social welfare arrangements, to which they have often contributed for decades.

Even after the latest increase, the Basic State Pension, which is paid to pensioners in their seventies and beyond, is only around £8,000 a year. Younger pensioners, who reached pension age since 2016, have a full new State Pension that is just over £10,000 a year. These payments are hardly a king’s ransom.

Older generations have been assured, by successive Prime Ministers and opposition parties, that their small state pensions will be protected. They can’t go out and earn more, many of them, especially women, have little else to live on. Without proper protection, promises to look after pensioners are worthless. Pensioner protection is a political choice about spending priorities. It is also a matter of morality and social responsibility. Our welfare state is based on people working and contributing to society for most of their lives, with their contributions assuring them of a basic pension – not a fortune, but enough to enable them to afford essential bills in exchange, when they are too old to continue.

The Government’s energy price cap may make it easier to budget for heating bills, but that does not cover rising food costs, insurance, over the counter pharmacy supplies and more. Means-testing is not the answer. The Labour Government in the early-2000s extended pensioner means-testing significantly when it introduced Pension Credit. If people find they are penalised for having a private pension, then more and more will not bother to save. Private pension savings plummeted in the years after the extension of mass-means-testing.

Pensioners are still important members of our society and our welfare state contract requires them to be treated reasonably. Having broken the solemn promise to protect state pensions last year, it was only right to ensure a proper rise this time. Millions have little more than this minimum to live on. I am delighted the Government has done the right thing.

Baroness Ros Altmann is a British life peer and former pensions minister.