Therese Coffey will move to protect pensioners from facing a threatened freeze in the state pension next year as a result of a drop in earning due to the coronavirus pandemic which could warrant a zero increase in pension payment from April 2021 following the Whitehall formula for computing benefits.
Work and Pensions Secretary Therese Coffey in a bid to avert the freeze will today introduce a technical Bill into the Commons. The new law will prepare the way for a pension rise of at least 2.5% for pensioners.
“The Government has worked hard to protect all age groups during the pandemic, strengthening the welfare safety net, introducing furlough and income protection schemes, as well as supporting those who have lost their jobs back into work.
“It is only right, then, that we also ensure pensioners can see their incomes protected as we build back better. In these difficult times, I want to give pensioners peace of mind about their financial health,” Therese Coffey said.
Government’s triple-lock pledge allows the state pension to rise each year by the highest increase out of average earnings, consumer prices or a minimum of 2.5%, while the Whitehall principle holds the pension rise each April to average earnings in the period of May and July in the past year.
After seeing the adverse effect of the lockdown, experts are expecting a slight drop in average wage growth during the three month period this year, which will result to a pension freeze unless the law is changed to ensure inflation or the minimum 2.5% figure is used.
Therese Coffey’s Social Security Bill is looking at ensuring the Government sticks to the triple-lock pledge system after rumours that it will suspend or even scrap the system considering that so much money has been spent in effort to bail businesses that suffered during the pandemic.
Ms Coffey is also respected to undertake a review of social security rates shortly and will report to Parliament on the outcome of the review in November as her Bill seeks to press government to increase Pension Credit and payments under the Industrial Death Benefit scheme.
Meanwhile, Chancellor Rishi Sunak is said to be pasuading the UK Prime Minister Boris Johnson to allow him abandon the Tory manifesto pledge in his next Budget as he seeks active measures to increase Treasury revenue considering the huge pressure that rest on Britain’s public finances.
The UK government has currently spent far above £190billion on emergency coronavirus controlled measures, which brings 2020 Treasury deficit soaring to about £350billion.