Pension increase 'not enough'

THE head of Age Concern Exmouth has criticised next year s 34p-a-day pension increase as not enough to alleviate pensioner poverty, and benefits should be similarly linked to inflation.

THE head of Age Concern Exmouth has criticised next year's 34p-a-day pension increase as not enough to alleviate pensioner poverty, and benefits should be similarly linked to inflation.

The Government has increased the single state pension by �2.40 a week from �95.25 to �97.65 from next April, with a retired couple's weekly income rising from �152.30 to �156.15.

Next year's 2.5 per cent increase is half last year's after inflation peaked at 5.5 per cent in September 2008 - pensions increase each April and are based on the previous September's inflation rates.

But pensioners are being disproportionately affected; many rely on their savings and are being hammered by record low 0.5 per cent interest rates.


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Chief Officer Steve Dace, ahead of next month's pre-budget report, has called for the Government to link benefits to inflation similar to pensions as struggling OAPs face a second winter this recession.

He said: "Although the commitment to raise the basic state pension by at least 2.5 per cent will be a relief for older people, a �97.65 a week pension is still not enough to ensure a decent standard of living to people who have worked hard all their lives.

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"While pension credit will rise in line with earnings, benefits linked headline inflation, such as attendance allowance and disability living allowance, will be frozen unless the normal procedures are changed."

Some pensioners face a rate of inflation effectively double the national average because while mortgage payments have fallen for many, food and energy bills have remained high.

Lower wholesale energy prices have not been passed on to consumers by energy companies, which are having an acute effect on pensioner households despite Government winter fuel payments.

He added: "With pensioner inflation still higher than for any other age group, the Government should allow some form of increase for inflation-linked benefits in the coming pre-budget report."

Ministers confirmed next year's rise will happen, even if inflation hits zero and a Department for Work and Pensions spokesman said: "New benefit levels and tax thresholds for 2010/2011 will be announced to Parliament at the Pre-Budget Report.

"Benefits can only be increased or stay the same - they could not fall as the result of a negative RPI.

"The State pension will be increased by 2.5 per cent or RPI, whichever is higher.

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