CRUMB OF COMFORT FOR PENSIONERS

Good news for pensioners is that the pension will rise to over £100 a week in April next year.

Given that inflation is well above the target rate set by the government, it is reckoned that the pension will rise by £4.49 per week to £102.14, still the lowest in the EU by percentage of the average salary at around 30%.

This will be a crumb of comfort to pensioners faced with some of the most miserable weather in the EU, with the numbers in fuel poverty doubling in the last 5 years. Add to that that energy prices are not restrained in any way, and that it is rumoured that emergency cold weather payments are set to be cut from £25 to £8.50, and we are looking at misery for old folk who have little more than their pension to live on in a winter that is predicted to be very severe.

Of course those who were prudent and saved something for their old age are being rewarded with almost zero return on their money, with interest rates at record low, and inflation far above anything that any savings account pays.

Let’s home that if Mr Osborne is going to reduce the amount paid as a winter fuel bonus to pensioners, that he does it only for the very richest pensioners for whom the extra £250 is of negligible interest.

According to the Telegraph, this will be the last time state pension payments will be based on RPI. The government, they say, is to switch to Consumer Prices Index (CPI) inflation starting next year. This may mean lower increases in payments from April 2012 onwards. For instance, last month while RPI was 4.6%, CPI was 3.1%.

I’m confused. I thought that that was only for other benefits. I thought too that the retirement pension was to be linked (as it always should have been) to wage increases. Of course at the moment that would probably mean what Mr Brown would call an increase of -4%.

Perhaps someone can enlighten me...?