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Working pensioners will be $1,840 worse off over two years

Working pensioners

The analysis for Labour shows the value of the State Pension is eroded in real-terms by nearly £300 ($394) next year – and will still be lower in real-terms in 2023/24 even if it is uprated by 5.9%

Working pensioners will be almost £1,400 ($1,840) worse off over the next two years amid soaring bills, real-terms cuts to pensions and a National Insurance hike, Labour warned tonight.

Shadow Work and Pensions Secretary Jonathan Ashworth will tomorrow use a Labour-led Commons debate to highlight the hit to OAPs’ finances.

An analysis for the party found a working pensioner earning the average salary, who is in receipt of the State Pension and liable to pay the planned 1.25% rise in NI, faces a real-terms reduction in their income of £770 ($1012) in 2022/23 and £622 ($817) in 2023/24 – a combined loss of nearly £1,400 ($1,840).

Ashworth said: Instead of protecting pensioner incomes as Boris Johnson promised, the Tories are cutting the state pension and clobbering pensioners in work with a tax rise, leaving them worse off by an eye-watering £1,400 ($1,840).

It’s daylight robbery and Boris Johnson has betrayed retired people, he said.

The Tories promised at the December 2019 election to maintain the pensions “triple lock”, which sees pensions rise by whichever is highest of average wage growth, inflation or 2.5%.

But the pledge was suspended last year because of a big surge in pay packets as the economy bounced back from the coronavirus pandemic.

The analysis for Labour, by the House of Commons Library, shows the value of the State Pension is eroded in real-terms by nearly £300 ($394) next year – and will still be lower in real-terms in 2023/24 even if it is uprated by 5.9%, the rate of inflation forecast for September.

Ashworth plans to use tomorrow’s debate to ‘call on the Government to protect all pensioners from the cost-of-living crisis, including taking immediate action to reduce home energy bills and halt their planned tax rise’.

He added: Pensioner poverty is increasing with older people facing impossible choices between eating and heating.

A Government spokeswoman said: We recognise the pressures people are facing with the cost of living, which is why we’re providing support worth £21billion ($27 billion) this financial year and next to help.

The spokeswoman said: This includes freezing fuel duties to keep costs down and helping households with their energy bills through our £9.1bn ($11 billion) Energy Bills Rebate.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.