Work and Pensions Secretary, Thérèse Coffey, has introduced a
technical Bill in the House of Commons that will give the
Government the ability to increase the State Pension next year.
Under current legislation, the State Pension can only be
increased if there has been a rise in average earnings in the
relevant period of the preceding year.
Due to the challenging economic circumstances, average earnings
are expected to show no growth in that period. This Bill makes
technical changes which allow ministers to deliver on their
commitment to the Pensions Triple Lock next year, even if there
is no growth in earnings in the relevant period, ensuring that
State Pensions can still be up-rated.
Commenting on the Bill, Thérèse Coffey said:
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.
Previous Governments have taken the same approach in similar
challenging economic circumstances - for example, in the Welfare
Reform Act 2009.
In accordance with the usual process, the Work and Pensions
Secretary will undertake a review of social security rates
shortly, and will report to Parliament on the outcome of the
review in November 2020.
Since 2011, the Triple Lock has ensured that the State Pension is
uprated by the highest of earnings growth, price inflation or
2.5%.
-
The Social Security (Uprating of Benefits) Bill was
introduced to the House of Commons on 23 September 2020.
-
This Bill is necessary to ensure that pensioners can be
supported with an increase in State Pension and Pension
Credit rates for 2021/22. Survivors’ benefits in Industrial
Death Benefit are also included in the scope of the Bill.
Without this legislation, that would not be possible since
the decline in the average earnings data means that the
Secretary of State would have no ability to increase these
rates. This Bill gives her that ability.
