LIZ Truss’s resignation days before her debt plan has plunged millions of Brits into uncertainty over their pensions and benefits.
The government was set to reveal plans to reduce the national debt in the publication of an independent review on October 31.
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But Chancellor Kwasi Kwarteng was axed last week ahead of his planned Halloween announcement, amid a horror show for the government.
With Prime Minister Liz Truss also falling on her sword today, millions of Brits can be forgiven for being spooked about what the future holds for their benefits and pensions.
The government has been warned by experts that it needs to find £60 billion to balance the books.
At the time, Mr Kwarteng revealed his “Medium Term Fiscal Plan” had been moved forwards to this month instead of November 23.
His replacement Jeremy Hunt revealed some of his plans in his mini-budget speech earlier this week, which saw a massive U-turn on Liz Truss‘ doomed £45billion tax-cutting plan.
In the statement, he rowed back on many of Kwarteng’s announcements, including scrapping the planned hike to income tax and reducing household energy bill protection as well as ditching planned duty cuts on beer, cider, wine, and spirits.
The National Insurance hike was also scrapped but cuts to stamp duty will stay.
Millions on Universal Credit and other benefits will have to wait to see if they will be better or worse off next year.
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Experts have raised concerns that millions on benefits will be pushed further into poverty if their payments are not increased to match inflation from April next year.
While 12 million face a cash cut over reports the government may abandon the state pension triple lock.
A spokesperson for Truss confirmed on Tuesday that the popular policy is under threat, despite it being a Tory manifesto commitment in the 2019 general election.
It would affect around 12 million OAPs with some retirees at risk of being £12,000 worse off.
If people think that we’ve seen the last of the reverses and u-turns with the resignation of Lizz Truss, think again
Martyn James
The triple lock is a calculation used to determine how much the state pension rises by each year.
It was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- Earnings – the average percentage growth in wages in Great Britain
- Prices – the rising cost of living in the UK, as measured by the Consumer Prices Index (CPI)
Figures from the Office for National Statistics showed that the number of Brits old enough for a state pension will go up by 31 percent, from 12.3m in 2012 to 16.1m by mid-2037.
And now with Truss gone amid mass turmoil in Westminster, financial experts have warned of further uncertainty to come over
Consumer rights expert Martyn James told The Sun Online: “If people think that we’ve seen the last of the reverses and u-turns with the resignation of Lizz Truss, think again.
“By far the costliest of all of the benefits paid in the UK is the triple lock pension.
“Even though it’s a vote loser to tamper with it, even conservative commentators and economists are telling me tonight that they don’t think that the April increase is feasible or realistic.
“I suspect that with both energy bills price caps and pensions, we will switch to a model in April that increases payments for the people struggling the most but leaves those in the middle with little to nothing.
“But six months is a long time – and it’s anyone’s guess what will actually come to pass when April rolls around.”
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Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, added: “Theoretically in her last PMQs before resigning Liz Truss committed to the triple lock.
“However, we’ve been here before, and political pledges don’t seem to have the staying power they once did.
“Since the triple lock was suspended last April, we have had three firm commitments to it.
“So far only two of those pledges have been followed by swift backtracking by a Chancellor with an eye on the purse strings, but there remains the risk that the departure of Liz Truss could mean we see it happen again.
“The uprating of benefits with inflation remains in doubt too. It was something Kwasi Kwarteng initially refused to commit to, before backing down under pressure, and the arrival of Jeremy Hunt in the post has thrown it into question again.
“It’s incredibly difficult to imagine why this wouldn’t be at the top of the to-do list of a Chancellor who has pledged to put the needs of the most vulnerable first.
“With so many of those on the lowest incomes struggling with horrendous hikes in the price of essentials, and forced to make terrible decisions between heating and eating, the wait to discover their fate will be agonising.”
