Cost of Living Crisis: Benefits and pensions rise 'significantly outpaced' by inflation rate

The slight increase to the state pensions and various benefits is “significantly outpaced” by inflation and “nowhere near enough” to address the cost of living crisis, organisations say as they voice concerns.

A 3.1% rise in the state pension and benefits – including universal credit – took effect on Monday. However, organisations and bodies say more action from both the UK and Scottish Governments is needed to help people through the current crisis.

It comes during a cost of living crisis impacting energy bills whilst UK inflation rose to a 30-year high in February at an annual rate of 6.2 per, up from 5.5 per cent in January.

Stephanie Millar, social justice policy manager at Citizens Advice Scotland said: “The increase of 3.1% to reserved benefits and pensions is nowhere near enough to address the cost of living crisis that is hitting Scottish households.

Organisations have voiced concerns as the increase to the state pension and various benefits is “significantly outpaced” by inflation and “nowhere near enough” to address the cost of living crisis (Photo: Kzenon).

"These increases are significantly outpaced by inflation and will lead to increased hardship for people.

“Free, confidential help is available from the CAB network on how to maximise your income and manage debts. But we want to see more action from both governments to help people through the current crisis.”

Adam Stachura, head of policy and communication at Age Scotland, agreed more government action is needed as he said the Scottish Government should emphasise what pensioners are entitled to.

He said: “The 3.1% rise is certainly better than no rise but it’s going to be outweighed by all the costs they face and all the bills that they have landing on their mats or in their inboxes.

"We’ve not even faced the really big bills.”

Mr Stachura said the rise could “have been a lot more” if the chancellor Rishi Sunak had not scrapped the “triple lock” when he did.

The triple lock is the three elements of the state pension: a flat 2.5% rise, average earnings growth and inflation.

Late last year, ministers decided to temporarily cut the state pension's link to average earnings, which would have led to an 8% rise now.

The UK government has pledged to reinstate pension triple lock in future years which Mr Stachura will “help a little bit” but he said “people are still playing catch-up”.

From the Scottish Government, Mr Stachura said there needs to be a nationwide push on what people are entitled to as well as removing stigma towards claiming social security.

"There are mechanisms and tools in place such as making sure people are getting every penny they are entitled to.

"There are hundreds and thousands of pensioners in Scotland who are either living in poverty or on incredibly low income and rely on the state pension as their core source of income.

"Over half a billion pounds worth of social security goes unclaimed in Scotland every single year. That’s based on 332 million for pension credit, 98 million for council tax reduction and another 10 or 20 million plus on warm home discount and other things. It really mounts up.

There are currently around 150,000 pensioners in relative poverty in Scotland with 11% of pensioners in persistent poverty – meaning they are in poverty three out of four years, according to Age Scotland. One in five people aged 55-64, are living in persistent poverty in Scotland.

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