34p a day increase in pension will not cover inflation campaigner warns

3.32.00pm BST (GMT +0100) Wed 21st Oct 2009

The Government has confirmed that the basic pension will rise by 2.5% next April - giving pensioners £97.65 a week.

However, a local campaigner has warned that the increase - equivalent to 34p more a day - will not even cover pensioner inflation.

"An extra 34p a day will not cover the inflation rate for most pensioners who face the double whammy of rising utility bills and ever rising council tax demands," said Mike Bell, the Liberal Democrat Parliamentary Candidate for Weston-super-Mare.

"Although a 2.5% increase is more than many working people will be getting, the state pension has been pegged to prices for 30 years and this increase is from a very low base. The urgent need is to restore the earnings link now, not wait for another Parliament."

Figures from the independent Institute of Fiscal Studies show that pensioners, on average, face annual inflation rates ten times higher than the rest of the population.

Mr Bell added: "Older people still find much of their income is swallowed up by high food and fuel bills, forcing many to make drastic cut-backs.

"This extra money still leaves British pensioners with one of the lowest pensions in Europe and not enough to ensure a decent standard of living to people who have worked hard all their lives. The pension system needs urgent reform to ensure older people can live off their pensions without having to apply for benefits."

The annual increase in the state pension is based on September's inflation figures, but is guaranteed to be no less than 2.5 per cent.