I have been contacted by constituents about the State Pension.
As the Member of Parliament for Milton Keynes South, I have included below my response:
Every year, the Secretary of State for Work and Pensions is required by law to review whether benefits have kept pace with inflation or earnings increases.
Over the last two years, the pandemic has caused a major distortion to the normal patterns of average earnings and in prices. In 2020, State Pensions increased by 2.5 per cent, when average earnings had fallen, and price inflation increased by half a percentage point. If this action had not been taken, State Pensions would have been frozen.
During 2021, the distortion remained. As millions of people left furlough and the labour market changed significantly, reported average wage growth was due to be over 8 per cent, correcting 2020’s fall. To increase pensions by this amount, – it would have cost £4-5 billion and would have been funded by increasing other taxes.
On 7th September 2021, it was announced that there will be a move to a Double Lock for one year only. This means the state pension will rise this year by the higher of inflation or 2.5 per cent, now confirmed as a 3.1 per cent increase.
This approach will ensure pensioners’ spending power is preserved and that they are protected from higher costs of living. It will also ensure that as we are having to make difficult decisions elsewhere across public spending – including freezing public sector pay – pensioners are not unfairly benefitting from a statistical anomaly.
My colleagues in the Department for Work and Pensions have assured me that this measure is temporary for one year, afterwards the Triple Lock will apply for the remainder of this Parliament, in line with our manifesto commitment.
In total, the basic state pension has increased by 35 per cent or £2,050 since 2011. It is now worth £137.60 per week – relative to earnings, the highest it has been in 34 years. The full rate for those that are receiving the new state pension is £179.60 per week, up from £155.65 when it was introduced in 2016.
These measures have meant there are 200,000 fewer pensioners in absolute poverty, compared to a decade ago. On top of this, pensioners continue to receive other support such as free bus passes and winter fuel payments to name just a couple.
I would like to reassure you that I will continue to work with colleagues in Parliament to consistently protect pensioners. However, If you, or someone you know is having trouble and requires support, please do get in touch with my office and we will assist where possible.
