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Cost of Living: Pensioners

Volume 822: debated on Thursday 26 May 2022


Asked by

To ask Her Majesty’s Government what assessment they have made of the cost of living increases on recipients of the state pension.

My Lords, no assessment has been made. The Government are aware of concerns about the cost of living. My right honourable friend the Chancellor is making an announcement on this issue today. Since 2010, the full yearly amount of the basic state pension has risen by more than £2,300 in cash terms. That is £720 more than if it had been uprated by prices and £570 more than if it had been uprated by earnings. State pension recipients are also supported by further measures for older people.

My Lords, I thank the Minister for her reply. In 2019, 68,000 pensioners died in poverty. That number will increase, as the real value of the state pension has been cut and another £800 energy rise is coming. Can the Minister commit to an immediate increase in the state pension of 15%? If not, can she return to the House in two weeks and explain why the Treasury is failing to support our pensioners?

The noble Lord understands that I cannot make that commitment. We understand that people are struggling—we really do—with rising prices of energy and other things. The Chancellor is clear that, as the situation evolves, so will our response, with the most vulnerable being his number one priority. He will set out more details today. All noble Lords and I will have to wait to hear what he says.

My Lords, what are the Government doing to help pensioners with the cost of living crisis? This is an emergency. Age UK has just released the report It Doesn’t Add Up, which quotes single pensioners who are

“anxious and depressed. I only shower once a fortnight and use the oven once a week. I do not know what else I can do”.

There is more the Government can do. I know my noble friend cares deeply about this issue; would she urge the Treasury to look at issues such as reducing the standing charge that single pensioners pay, increasing the value of the warm homes discount, which after 10 years is still just £140, and perhaps increasing pension credit, by £20 a week, for this emergency situation?

I thank my noble friend for making those points. I have no desire to wind up noble Lords, but please can we wait and listen to what the Chancellor says? Perhaps then we can speak again about your question.

My Lords, does the Minister agree that, along with some pensioners, the most vulnerable people in our society are those of working age who cannot work, because of disabilities, mental health problems or other issues? I understand from the media reports that the Chancellor will be focusing help on working-age people who can work, urging them into work with incentives and so on. Will the Minister draw to the Treasury’s attention this incredibly vulnerable group of people who will simply not be helped at all, according to press reports about the Treasury support?

I confirm to the noble Baroness and the whole House that the Chancellor and his team are cognisant of the issues that the most vulnerable are facing—those who cannot work and those who are in work but wish to do better. He is clear that, as this situation evolves, his response will evolve too. The most vulnerable are at the heart of what the Government want to do, so please be patient.

My Lords, Age UK said that, before the pandemic, 1.3 million pensioners in England were suffering from the “risk of malnutrition”. It adds that

“1.4 million older people … have been eating less since the start of the pandemic”

and are

“at a greater risk of becoming malnourished”.

What estimate have the Government made of the risk of malnutrition among pensioners and what are we doing about it?

We have sought to help pensioners at this very difficult time. On the noble Lord’s specific point about malnutrition, if he accepts, I will need to write and place a copy in the Library for all noble Lords.

My Lords, is it not the case that the level of state pension in this country, at less than £9,000, is not a sum on which most people can be expected to live? In Germany, the state pension is £26,000 a year; in France, it is £15,800. Do the Government now regret suspending the triple lock?

Noble Lords know that the triple lock was suspended for this year in very difficult circumstances in the country, but the Chancellor has confirmed that it will be reinstated.

My Lords, how much has the state pension increased by since 2010, both as a proportion and as an amount of money?

As I said earlier, since 2010, the state pension has risen by £2,300 in cash terms and the full-year basic state pension is now over 45% higher than in 2010.

My Lords, I am glad the Chancellor is finally putting something on the table, although we do not know what yet, but does the Minister agree that the process is not great? The Spring Budget was only two months ago. We begged the Chancellor to do more on the cost of living and he ignored us. We suggested a windfall tax and the Prime Minister ridiculed it. The Government did not have to legislate for the biggest real-terms cut in the value of the state pension for 50 years. We do not yet know what the Chancellor is going to do, but the rumours always appear to be about one-off payments. Even if there is something to tide people over, it will not deal with the collapse in the standards of living. Why have Ministers ruled out bringing forward pension and benefit increases? Does the Minister accept that prices are unlikely suddenly to slump again but, if they did, upratings would pick that up next time round anyway? Or will the Chancellor be back here again in a few months?

If the noble Baroness does not mind, I do not agree that the Chancellor has ignored things. He has had to deal with a pretty difficult set of circumstances. Due to legacy benefits, we can do an uprating only once a year, the reasons for which all noble Lords know. Since 1987, we have consistently used the September inflation figure and that will continue.

My Lords, one-third of the household support fund is earmarked for pensioners. The second tranche of £500 million, which is not a great deal, came into play on 1 April this year. Could the Minister tell us how much of that fund has already been exhausted, how quickly the first tranche was exhausted and what work has been done to evaluate the effectiveness of the household support fund?

I confirm that the Department for Work and Pensions requires local authorities to provide management information returns detailing their spend and the volume of awards made for food, energy and water bills. MI returns for the scheme, running from 6 October 2021 to 31 March 2022, will also detail grant spend and the volume of awards made to families with and without children. This will be published in the coming months.

My Lords, does the noble Baroness understand that pensioners’ incomes, this time, this year, are 5% lower in real terms than they were last year? Part of the reason for that is the excessive delay between the index and when increases are paid. Is it not time to fully computerise the state pension so that increases can meet the challenge of inflation?

As I have said, the state pension uprating relies on legacy IT systems that must be coded well in advance of the uprating. The noble Lord makes a good point about the impact of good IT systems; I am not going to argue with that. Additionally, state pension rates need to be confirmed in advance of uprating because claimants can claim their state pension four months before they reach state pension age and they need certainty about the value of their entitlement.