Good news for the state pension ; fingers crossed for pension credit.

This was the news we were given yesterday (18th October)

My reaction to this news was initially “fury”, which tempered to “resignation” and became through the morning  “hope”.


Dotun Adebayo, who I admit to spending rather too much time listening to between 1am and 5am, ran a phone in – to which elderly people phoned in – accepting that they would have to cut their cloth according to the increase they received.

We now know that the September CPI figure is 10.1%, food and non alcoholic drink prices are now 14.5% higher than they were a year ago. You can check out your personal inflation rate by going to I fear the rates of those with least discretionary spend , will find the numbers well in excess of 10%.

Dotun estimated that upgrading by earnings rather than inflation would cost a pensioner about £8 a week. Assuming an RPI annuity from 67 (with the boost of the triple lock) might cost around £30 for a lost pound of pension , this looks to me a cut in everyone’s pension expectation that can be valued at £12,000 for the annual loss of £400+.

So with my “angry” hat on , I’d like to point out that not uprating by the triple lock will reduce my retirement expectations by around £10,000 (I’m six years away so I’ve discounted to today’s pounds). This cod arithmetic at least gives me a way of thinking about what I am being asked to give up and if everyone thought of it this way, then perhaps more people would share my wrath that a) Liz Truss was telling us that the state pension wasn’t losing its triple lock this year and b) that with inflation at over 10%  , this year is the very year that we needed the third lock -inflation proofing.


With my “resigned” hat on, I recognise that the state pension is a universal benefit that would pay that extra £8 out to everyone, whether that £8 went on just meeting a fuel bill or made a negligible addition to a wealth management account.

If we are in a dire economic situation, the luxury of universal upgrades may be too high. Painful as it is to concede upgrading  the triple lock for a second year, I am resigned to it happening, I have lived with that prospect for some time and the deadening thud of the BBC headline came to one prepared. If Truss’ lunchtime promise is not kept, pensioners  may still not  get a cost of living increase to their state pension and pensioners will have to tighten belts, where there is room to tighten.

Baroness Neville-Rolfe

Necessarily too , the state pension is having to be pushed back. I am  resigned to the result of Lucy Neville Rolfe’s study of the state pension age telling us that the state pension age will be 68 for those reaching that age from 2035. We aren’t bringing enough children into the workforce, there is insufficient immigration to support the booming generation that is reaching retirement over the next ten years. Despite longevity  decreasing (and decreasing this year at an alarming rate) we need to keep working (me included).

We need to be more productive (and reproductive) , not just to keep ourselves paid , but to pay into our later life retirement pots. We need to accept that the chimera of early retirement is – for most of us – no more than a carrot leading the donkey.

Jam tomorrow?



Well no one expected yet another change of position, but we got one at Parliamentary Questions. This was how the BBC’s Chris Mason reported the Prime Minister’s next rabbit.

” Liz Truss brought news: Pensions WILL keep up with rising prices.

Everything was put on the table by the new Chancellor Jeremy Hunt as he looks at the numbers. The PM has just taken pensions off that table.”

I am of course relieved that the state pension’s triple lock will be retained. This is caveated only by memory that the average prime ministerial promise has a shorter duration than a Bank of England market intervention.

When I was young I actually thought that a rubbish state pension was an incentive to save and there may be misguided pension salespeople who still think that. I don’t! But I do see better ways of targeting taxpayer money to those in old age who really need it.

If the state pension is upgraded by 10.1%, we must not let other benefits be left behind.

Pension Credit must be uprated at least by inflation  to provide a safety net for those both old and poor. Not only that but we must redouble our efforts to increase awareness of this benefit and- through publicity arising from changes announced on 31st October, there is an opportunity not just to improve pension credit for those receiving it, but to extend its take up to those eligible who do not take it up.

Harsh as it sounds, we must prioritise the elderly poor over those poor of working age so I support special treatment for pension credit over universal credit, other than where working benefits are being paid to those unable to work.

There is nothing economically productive about supporting those who are old and in need, but it is a mark of any civilised society that it does so. In former years this was the start of “Caritas” – something more than charity – (which can be a condescending word). Caritas – is about ending poverty, promoting justice and restoring dignity, it is the name for the great Catholic charity that recognises our individual and collective responsibility to those who have too little to live on.

The State Pension is  supported by Pension Credit which is a means tested benefit that unlike the state pension , still has to be claimed. This is scandalous . In an age of artificial intelligence that can identify the books we like and  the groceries we buy , we cannot even identify those we live among who are both old and needy. Instead of using data , we demand that these elderly people self-identify and apply for benefits which – by dint of their frailty of mind, limb or confidence, they find hard to do. The numbers not claiming pension credit may have come down after the great work of the DWP over the past 24 months but they are still way too high.

A rational response from Government to the problem of targeting elderly poverty would be to invest in upgrading systems to a point where those deserving were auto-enrolled into pension credit. This could be done, were the will of Government there to do it.

My optimism tells me that we should hope that when Jeremy Hunt makes his announcements at the end of this month, he commits not just to upgrading pension credit by the cost of living, but that he commits to make it a benefit that is not claimed but paid automatically to those for whom there is no alternative way to meet the bills.

And it is my fervent hope that the promise made by Liz Truss in the House of Commons this lunchtime, is actually kept.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in pensions and tagged , , , , . Bookmark the permalink.

5 Responses to Good news for the state pension ; fingers crossed for pension credit.

  1. Gareth Morgan says:

    Pension Credit Guarantee must be uprated by at least earnings by regulation. Historically it has been occasionally raised by more for various reasons. The government is very keen to ensure that the MIG never goes higher than full nSP.

    • henry tapper says:

      Gareth, that’s a great point. There is however a problem with the Government saying “never”. What is promised will “never” happen, happens a lot – especially now.

      The Government’s fear is that people will qualify for pension credit by dint of having no other income than the state pension, but if the state pension is downgraded as it looks like being, pension credit is downgraded too. We need to break this doom loop and accept that what matters is reducing pensioner poverty, not focussing on a few people who might be rewarded for being deliberately poor.

  2. RWT says:

    Did I mishear, or did the Prime Minister just commit, unequivocally, to maintain the triple lock during Prime Minister’s Questions? Is that a U-turn on a U-turn? I think I’m getting dizzy …

  3. henry tapper says:

    You didn’t mishear ; this from Chris Mason of BBC;

    “Liz Truss brought news: Pensions WILL keep up with rising prices.

    Everything was put on the table by the new Chancellor Jeremy Hunt as he looks at the numbers. The PM has just taken pensions off that table”

  4. RWT says:

    Indeed, albeit that, on previous experience, one might be forgiven for thinking that today’s promise is tomorrow’s apology …

Leave a Reply