Pressure is mounting on Jeremy Hunt to give pensioners a Budget boost as alarming figures reveal annual incomes for over-60s with jobs have plummeted by £3,000. Alarming new analysis shows their average real earnings are £2,200 lower than in 2020/21 while income from the full State Pension is £800 lower after adjusting for inflation.
The findings have intensified demands on the Chancellor to do more to help hard-pressed pensioners when he delivers his financial statement in a fortnight.
Labour’s Jonathan Ashworth, told the Daily Express the government is “failing to protect pensioners from the cost of living crisis”.
The Shadow Work and Pensions Secretary said: “Jeremy Hunt is telling early retirees to get off the golf course and get back to work yet older people in the office are worse off thanks to the cost of living crisis.
“Many older people want to return to, or stay in, the workplace yet government ministers are failing to offer them any serious help to do so.
“With employment lower than pre-pandemic and employers desperate to fill vacancies, giving the over 50s tailored help to find jobs will be a priority for a Labour government as we get Britain back to work.”
Mr Ashworth says the data highlights the devastating loss in real income comes with inflation still near a forty-year high and following the “Tories’ broken promise” on the Triple Lock on State Pensions.
He is also expected to slam the Government’s “delayed and indecisive” approach to pensioners and set out more of Labour’s plans to support older people at the TUC Pensions conference today (Wed).
But a Government spokesperson said: “This year we will spend over £110 billion on the State Pension and the full yearly amount of the basic State Pension is over £2,300 higher than in 2010 thanks to the triple lock.
“We have also committed to the biggest State Pension increase in history, which means that, from April, the full New State Pension will be over £10,000 a year for the first time.
“In addition, the success of our recent Pension Credit campaign is helping drive the volume of Pension Credit claims being submitted to an all-time high.
“We’re also investing an extra £22million in employment support for the over 50s – expanding our Jobcentre Mid-Life MOT service and providing personalised support through our Older Worker Champions, on top of our individually tailored one-to-one support delivered by work coaches.”
The Tory Party hit out at Labour’s previous track record, which led to the UK having one of the worst rates of pensioner poverty in Europe.
A Tory source said: “Under Labour, this country had among the highest levels of pensioner poverty in Europe. There are now 400,000 fewer pensioners in absolute poverty compared to 2010.
“This Conservative Government has ensured the biggest cash increase to the Basic State Pension ever as well as providing millions of pensioners with direct support on their energy bills.”
Campaigners have also urged ministers to do more to help as many over-60s who have jobs are “feeling the pinch”.
Dennis Reed, the director of over-60s campaign group SilverVoices, said: “Costs are sky-high but many working pensioners have effectively seen their incomes plummet over the past 12 months.
“Costs are rising faster than what they can earn and the state pension is much less once inflation is taken into account. It’s not very easy for them to do more hours or another job to help make up for the shortfall.”
He said the Chancellor needs to dig into the Treasury’s coffers to give pensioners a helping hand.
“Inflation isn’t going to be back where it should be for a long time yet so some short-term help from Mr Hunt would be welcome.”
The analysis by the House of Commons Library – commissioned by Labour – shows that in the current financial year, estimated net income for a working pensioner in receipt of the full state pension and earning the average salary for someone aged over 60 is £3,050 lower than in 2020/21, after adjusting for CPI inflation.
The effective loss is comprised of £2,240 lower income from real wages and a state pension income that is £810 lower after adjusting for inflation.
The Department for Work and Pensions points out that people over State Pension age and on a low income could be eligible for Pension Credit.
The average Pension Credit award is worth more than £3,500 a year.
Even a small Pension Credit award can provide access to a wide range of other benefits – such as help with housing costs, council tax or heating bills – in addition to the extra cost of living payments.
The DWP says it delivered up to £600 of targeted support to 11.6 million pensioners through the colder months, and we are repeating this support again next winter.
In 2020-2021 the gross earnings for over-60s were £28,848 and £30,468 in 2022-2023. Adjusted for CPI inflation this means 2020/21 figures equate to £33,040 in 2022/23, a real terms fall of £2,570.
In 2020-2021 the net earnings for over-60s were £23,753 and £24,960 in 2022-2023. Adjusted for CPI inflation this means 2020-2021 figures equate to £27,200 in 2022/23, a real terms fall of £2,240.
In 2020/21 the annual state pension for over-60s was £9,132 and £9,648 in 2022-2023. Adjusted for CPI inflation this means 2020-2021 figures equate to £10,460 in 2022/23 a real terms fall of £810.
The total net income of over-60s was £32,885 in 2020-2021 and £34,608 in 2022-2023. Adjusted for CPI inflation this means 2020-2021 figures equate to £37,660 in 2022-2023 a real terms fall of £3,050.
