More than 1.25 million pensioners have no emergency funds at all – a 56 per cent hike in just 12 months. Pensioners have been left at the “sharp end” of the cost of living crisis with many forced to dip into their cash reserves to make ends meet. Experts said the crisis showed how the triple lock must be maintained to ensure older people have a dignified retirement.
Ex-pensions minister Sir Steve Webb, partner at pension consultants LCP, said: “It is shocking how many pensioners have very little by way of a nest egg to help cover large or unexpected bills.
“This makes it all the more important that all pensioners have a decent regular income from their state pension.
“The triple lock is a key protection for pensioners, helping to ensure that the state pension gradually recovers some of the value it lost over three decades when it was linked only to inflation.”
Analysis of Department of Work and Pensions statistics shows more than 1.25 million pensioners had no savings in the 2021/22 financial year, compared with 800,000 the previous year.
According to the Labour assessment, 26.7 per cent of pensioners had savings of £1,500 or less in 2021/22 compared with 25.2 per cent two years earlier.
Some 234,000 more pensioners had savings below £8,000 while 180,000 fewer pensioners had savings of £8,000 or more.
Around 100,000 fewer pensioners had savings of £20,000 or more at the start of 2022.
Shadow Work and Pensions Secretary Jonathan Ashworth said pensioners were digging into their savings to make ends meet.
He added: “Labour warned that pensioners were at the sharp end of the cost of living crisis – but the Tories refused to act sooner.
“While families across the country were digging into their savings to make ends meet, the Tories were hiking taxes on working people and imposing the largest ever real-terms cuts to the State Pension.
“They couldn’t have been more out of touch with the British people if they’d tried.
“Labour will always be on the side of pensioners. A Labour Government will guarantee security and dignity in retirement.”
The triple lock guarantees that state pensions rise by at least the rate of inflation, earnings growth or 2.5 per cent every year.
Rishi Sunak suspended it in April 2022 for a year as Chancellor after a quirk in the figures caused by the covid crisis.
A growing band of economists has called for it to be changed or dropped to help save the Treasury cash.
The Institute for Fiscal Studies has argued there is a growing gap between the working age benefits bill and the cost of pension while former pensions reviewer John Cridland claimed protecting the guarantee while continuing to push up the state pension age did not help all older people.
Last month, the latest independent review of the state pension age, Baroness Neville-Rolfe, claimed the “ratchet effect” of the guarantee “may be less easy to rationalise” after a fall in relative poverty of retirees.
Dennis Reed, director of Silver Voices, said the figures showed savings were being squeezed even before the triple lock was suspended for covid.
“It shows how unfair that suspension was,” he said.
“People are using their meagre savings in order to exist in the current climate.
“It is unconscionable that people don’t have a small pot of savings to deal with household emergencies.
“The triple lock is absolutely essential.”
Lord Foulkes, Co-Chair of the All-Party Parliamentary Group for Older People, said: “These dramatic figures show that many older people are on an escalator down towards increased poverty fuelled by the huge rise in the cost of living.
The only hope of stemming the tide of misery is the triple lock and we must now redouble our effort to get a long term commitment from all parties to keeping it as we approach an election.
“They also confirm that those who are fuelling an inter-generational battle between poor older people and poor families are wickedly diverting attention from the growing wealth of those already rich.”
Jan Shortt (CORR), General Secretary of the National Pensioners Convention, said: “The analysis of DWP figures is welcome proof of what the NPC has been stating for some time.
“The ability to save on low income for your retirement gets harder every year with government measures that give with one hand and take with the other.
“It is no surprise, therefore, to learn that there is an increase in the number of pensioners who have no savings at all.
“The basic state pension is inadequate and it is important to understand the relevance the triple lock plays in giving older people an increase on their fixed income.
“However, the NPC also believes that the solution to pensioner poverty lies not just in the triple lock, but in having a decent state pension for everyone and a retirement age that allows them to enjoy some years of relaxation after a lifetime of work.
“Our policy is for a state pension set above the poverty level at 70% of the National Living Wage (outside of London), plus the triple lock. Even with this, pensioner income will still only be half the average earnings.
“The current cost of living crisis has exposed the true state of pensioner poverty and highlighted the increase in wealth at the other end of the scale.”
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