A Tory triple whammy of soaring prices, a tax hike and a lower State Pension could see 1,279,716 working pensioners in North West £1,400 worse off over the next two years, according to new analysis published.
New analysis from the House of Commons Library, commissioned by Labour, shows that working pensioners could be an average of £1,400 worse off over the next two years.
A working pensioner earning the average salary, who is in receipt of the State Pension and liable to pay the Health and Social Care Levy, face a real-terms reduction in their income of £770 in 2022/23 and £622 in 2023/24, an almost £1,400 loss.
The analysis also shows the value of the State Pension is eroded in real-terms by nearly £300 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 that is forecast for September 2022.
Commenting on the figures. West Lancashire MP Rosie Cooper said:
“Thousands of retired people in West Lancashire work, to contribute to our communities or to supplement their state pension which is facing a real terms cut this April.
“It’s disgraceful that working pensioners are facing a triple whammy of soaring prices, tax rises and a real terms cut to their state pension. Under the Tories, pensioners are worse off.”
Shadow Work and Pensions Secretary Jonathan 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 £1400.
“It’s daylight robbery and Boris Johnson has betrayed retired people.
“Pensioner poverty is increasing with older people facing impossible choices between eating and heating. The upcoming NICs rise should be halted this week and action should be taken to reduce energy bills by hundreds of pounds for those who need help as Labour has proposed.”
Analysis from the House of Commons Library, commissioned by Labour, shows that a worker earning the average salary for over 60s, who is in receipt of the full State Pension and liable to pay the Health and Social Care Levy from 2023/24, will see a real-terms reduction in their income of £771 in 2022/23 and £622 in 2023/24. Across the two years, that amounts to £1,393.
The analysis is based on Bank of England forecasts for inflation, assumes wage growth of 4.3% in 2022/23 and 3.7% in 2023/24 (using OBR projections), and also assumes the State Pension is uprated by CPI inflation of 5.9% in 2023/24 (in line with the Triple Lock).