The UK government has been accused of "daylight robbery" after new figures suggest pensioners will see a huge drop in their income next year. According to new analysis, older people will be £427 worse off after the Government decided to suspend the pension mechanism last September.
Jon Ashworth, Labour's shadow work and pensions secretary, accused the Government of "daylight robbery" over the decision to suspend the state pension triple lock. Figures from the Labour Party suggest retirees will see a huge drop in their real income over the next 12 months.
The triple lock has been in place since 2010 after a pledge in the Tory manifesto in 2019 to increase the basic state income by the highest out of average earnings figures, inflation or 2.5 percent. However, in September last year the Conservatives suspended the triple lock for a year.
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Work and Pensions Secretary Therese Coffey said a "statistical anomaly" caused by the end of the Covid furlough scheme was set to give pensioners an eight percent increase in payouts, reported the Express. Honouring the commitment would have cost the Treasury £3billion a year. Instead, the Government said the basic state pension will rise to £9,648 in April — a 3.1 percent increase compared to the previous year. However, a surge in energy prices has led to inflation skyrocketing.
Prices have risen by 6.2 percent - the highest increase in 30 years - pushing up the cost of living. It means pensions are increasing by a lower amount than prices, causing a real terms pay cut.
The Bank of England is also forecasting the situation to get worse over the next 12 months, with the consumer prices index inflation model predicting an eight percent increase in June. The bank warns inflation could hit double-figures by the end of the year.
Labour said retirees were now "cutting back on hot meals" and "forgoing hot showers" because of the real terms cut. Mr Ashworth said: "Far from helping retirees with the cost of living crises as promised Rishi Sunak has just imposed the biggest real-terms cut to the basic state pension in 50 years.
"When heating bills are going through the roof, this pension cut amounts to daylight robbery and will make things more difficult for thousands of pensioners." He continued: "Pensioners have been betrayed by Boris Johnson."
There had been calls for Rishi Sunak to reverse his decision on the triple lock when he unveiled his Spring Statement in the Commons last week. Despite the pressure he stuck to his guns and refused to reintroduce the mechanism his party vowed to implement at the ballot box.
Earlier this month Ms Coffey vowed the "triple lock will be honoured for the rest of this Parliament". The Prime Minister’s official spokesman added last week: "We have made clear that it was a temporary pause." Adding: "No one can predict what inflationary pressures will be, but certainly, there is no change to the commitment we have made."
