Pensioners find little comfort in £3 rise

Britain’s basic state pension is to rise by less than £3 a week – offering little to help to households facing steep rises in energy bills – as the Treasury pockets £1.5bn in savings from a benefits squeeze.

The anticipated pensions rise from £110.15 to £113.10 is linked to September’s official CPI inflation figure of 2.7 per cent, which was published by the Office for National Statistics.

Hide Ad
Hide Ad

But it comes just a week after electricity and gas supplier SSE became the first of the Big Six energy companies to hike tariffs this year, announcing an 8.2 per cent rise which is three times the Consumer Prices Index rate.

Campaigners say the Government should restore a link between pensions and a different inflation measure, the Retail Prices Index (RPI), which they say would have resulted in a £3.50 rise.

Dot Gibson, general secretary of the National Pensioners’ Convention, said the decision to abandon the link after the 2010 election had robbed older people of a proper increase in their pensions.

She said: “Many older people are struggling with the rising costs of living and our pensions are simply not keeping pace.”

Hide Ad
Hide Ad

RPI, currently at 3.2 per cent, is still used to calculate rail fare rises and the amount the Treasury collects in business rates – though the CBI is calling on the Government to put a lid on any increase in these charges.

According to the British Retail Consortium, the rise if implemented would cost retailers £242m a year, risking shop closures and jeopardising nearly 20,000 jobs.

Meanwhile, the Government said yesterday’s inflation figures meant that a one per cent cap on some welfare rises, announced last year, would represent a £1.5bn saving for 2014/15.

The payments – which include child benefits and job seekers’ allowance – would have been higher if instead of being capped they had still been linked to CPI.