The Department for Work and Pensions (DWP) has responded to an online petition calling for State Pension payments to be increased to £380 per week to match the new National Living Wage rate, saying that the UK Government “disagrees” with its proposed approach.
The ‘Increase the State Pension to £19,760 a year (£380 a week)’ petition was created last month by Stephen Edward Wyatt. It has already received more than 42,115 signatures of support (at time of writing) from people living in every council area in Scotland, England, Wales and Northern Ireland - which you can view on the interactive map here.
However, the DWP response outlines how this option is not plausible, explaining how State Pension and the National Living Wage have “different purposes and a direct comparison cannot be drawn”.
The DWP said: “The [UK] Government disagrees with the proposed approach of this petition. This petition suggests linking the State Pension and the National Living Wage (NLW). The two have different purposes, and a direct comparison cannot be drawn. The NLW aims to protect low income workers and provide an incentive to work by ensuring that workers benefit from being employed. Most pensioners have left the labour market.”
It goes on to say that comparisons made in the petition between headline State Pension payments and the NLW do not consider the full package of measures available to support older people in retirement.
DWP explained: “In addition to the headline State Pension amounts, there are many further sources of financial support for pensioners.
“Those aged over State Pension age are entitled to free eye tests, free NHS prescriptions and free bus passes. Those aged over 75 and in receipt of Pension Credit are eligible for free TV licences. In addition, Winter Fuel Payments provide pensioners with support for their energy bills worth over £2 billion every winter.”
The response also said: “The new State Pension provides better outcomes on average for low earners, the self-employed and many women. The full yearly rate of the new State Pension is now over £9,650 per year.”
It also points out that automatic enrolment into workplace pensions was introduced to encourage more people to save for their retirement, meaning more than 10 million employees have now been automatically enrolled into a workplace pension.
The DWP concluded its response by saying: “This year, the [UK] Government will spend over £134 billion on the State Pension and benefits for pensioners in Great Britain.
“Based on the most recent data from August-2021, yearly average amounts of State Pension in payment are £ 8,302 per individual.
“Since 2010, the full yearly amount of the basic State Pension has risen by over £2,300, in cash terms and £720 more than if it had been uprated by inflation.”
State Pension payment rates increased by 3.1% on April 11, 2022, which means the basic State Pension has now gone up to £141.85 per week from £137.60 and the full, new State Pension to £185.15 from £179.60 - payments are made in arrears so the uplift will not been seen straight away.
But the cost of living crisis, heightened by soaring energy bills, is putting additional pressure on household finances, which cannot keep up with rising inflation which now sits at 7% and is expected to jump even higher next month.
For many of the 12.4 million people across the UK claiming their State Pension, including 981,399 living in Scotland, it is potentially going to hit them hardest as this could be their only source of income.
At 100,000 signatures, the petition would be considered for debate in Parliament.
Read the full DWP response to the petition here.
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