Cost-of-living crisis will wipe out £972 rise in state pension

Deepening cost-of-living crisis will wipe out £972 rise in state pension which comes into force this week, charities warn

  • From today pensioners will see their payments rise by nearly £19 a week
  • But this means little due to the cost of food, energy, fuel and accommodation 

The deepening cost-of-living crisis will cancel out this week’s rise in the state pension, charities have warned.

From today pensioners will see their payments rise by nearly £19 a week, the equivalent of around £972 a year.

But campaigners say the rising cost of food, energy, fuel, social care and accommodation has wiped out the boost.

Caroline Abrahams, Age UK’s charity director, said: ‘This increase will give some relief but won’t be enough to help many make ends meet.’

John Palmer, policy director at the Independent Age charity, said the types of calls it is receiving from older people has ‘massively shifted to money worries over anything else’.

From today pensioners will see their payments rise by nearly £19 a week, the equivalent of around £972 a year. File image

Age UK’s charity director Caroline Abrahams (pictured) said that the increase will give some relief but will not be enough

Inflation has pushed the cost of groceries up by around £837 a year for a typical household, while energy costs have risen by around £1,223.

The state pension triple-lock – where payments are increased in line with either inflation, earnings growth, or 2.5 per cent, whichever is higher – was restored for the new financial year.

It means the payment increases by 10.1 per cent, from £185.15 per week to £203.85.

Ms Abrahams said: ‘Although the full state pension is £10,600 a year, most pensioners receive less than this and are going to need greater support to deal with the cost-of-living crisis.

‘Maintaining the triple lock in future years is important, while the Government should be carefully looking at what other financial support might be necessary.’

Mr Palmer added: ‘We now receive hundreds of calls a month asking for cost of living support, grants, or a way to increase their income. We’ve heard from older people skipping meals, risking their health because they can’t use the heating and living in isolation because they can’t afford to go out.

‘This shouldn’t be happening in modern Britain.’

Jeremy Hunt’s commitment to keeping the pensions triple-lock was a key tenet of his first Autumn Statement as Chancellor.

But analysis of day-to-day expenditure has suggested the pension increase will be swallowed immediately.

Andrew Tully, technical director of finance company Canada Life, said: ‘Pensioners will be feeling apprehensive and worried, despite the triple lock increase adding £972 a year to those fortunate enough to receive the full state pension.

‘Even a household where a couple both receive the full state pension will see the triple lock increase wiped out by the price rises we are experiencing.

‘This is a difficult time for many but especially those households on fixed-incomes, typically pensioners.’

A government spokesman said: ‘The full rate of the New State Pension will be more than £10,000 per year for the very first time, while the Basic State Pension will be over £3,050 a year higher than in 2010.

‘We’re also boosting Pension Credit for those on the lowest incomes. The average Pension Credit award is worth more than £3,500 a year and the success of our recent Pension Credit campaign is helping drive the volume of claims being submitted to an all-time high.

‘But we also recognise the ongoing pressures of the rising cost of living, which is why we have provided record levels of additional direct financial support for the most vulnerable – £1,200 last year and a further £1,350 in 2023/24 – while the Household Support Fund is helping people with essential costs.’

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