Pensioners

Jim Pickard

The Telegraph and the Mail have today covered the story that the government will unveil a new universal state pension in an imminent green paper. The £140/week pension (rising to £155 in four years’ time) is roughly as anticipated when the story first broke last autumn. It is a less complicated system than the current basis state pension which can be topped up with additional benefits such as the pension credit.

What has barely been noted, however, is that the coalition nearly endured a defeat in the House of Lords on Wednesday night over its long-standing plans to lift Britain’s retirement age. 

This was always a problem George Osborne would be unable to solve. As a result of this spending review, pensioners next year will receive £600m less in winter fuel payments.

Does this break the Tory pledge in the election? Not quite. When David Cameron made his read my lips campaign promise, he vowed to “keep what we inherit” on winter fuel payments, free bus passes and other benefits to pensioners.

Most people would have expected that to mean that he matched the same payout as Gordon Brown.

But the Treasury accounts are a funny thing. As I disclosed in August, Brown only booked in a payment of £2.1bn in 2011. The additional £600m was his Christmas bung, a festive gift to show how munificent a leader he was. It was a one-off that he re-announced every year.