Sunak likely to overturn push to review triple lock suspension and more of this week’s finance news

Sunak likely to overturn push to review triple lock suspension and more of this week’s finance news

 · 11 min read
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This week saw the reduced state pension increase cause outrage among many Brits, but Rishi Sunak is unlikely to review the decision to suspend the triple lock system.

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Following a recent defeat at the House of Lords, Chancellor Rishi Sunak was urged to rethink the suspension of the triple lock system. The suspension of the system has led to the state pension increase for next year falling from 8.3% to just 3.1%, which has caused outrage among many British pensioners.

Last week, in the House of Lords, an amendment was passed that calls upon the government to review its decision to suspend the system. Ros Altman and peers from the House of Lords want the government to consider the financial impact that the Covdi-19 pandemic has had and consider making amendments to the system rather than suspending it. 

Rethinking the Budget

Experts believe that despite the calls for a review by the House of Lords, the Chancellor is unlikely to overturn the decision because he would otherwise have to rethink his recent Autumn Budget.

Addressing Mr Sunak and his team of MPs, Baroness Altman said, “The Government is able to adjust the earnings data to account for the impact of the pandemic measures. We are already in a cost-of-living crisis and official forecasts are for inflation to rise to four percent and maybe much more next year.”

She added, “It is a matter of principle and trust. Pensioners are not a piggy bank for Chancellors to raid when money is tight. They are not a cash machine that the Treasury can take money from when they want to spend on other priorities. Pensioners deserve better.”

Former Pensions Minister, Steve Webb, agreed that it was improbable that the government would give in on this issue despite calls from the House of Lords. He said that no government liked to experience defeat in the House of Lords but that they would often concede in a bid to get legislation through. However, he added that on issues such as this, this appeared to be an unlikely outcome.

Mr Webb also said that the government would use its 'comfortable majority' in the House of Commons to overturn the House of Lords decision. However, he said that this was also a sign that there would be considerable opposition if the government attempted to suspend the triple lock system for more than one year.

Grandfather falls victim to family WhatsApp scam

A grandfather has been scammed out of his Christmas savings after receiving a WhatsApp message claiming to be from a family member.

Scams over text and messaging apps have become increasingly common over recent years and have risen sharply since the start of the pandemic. One particular scam that targets people of all ages is carried out via WhatsApp, with scammers claiming to be close family members needing urgent financial assistance.

Many people have fallen victim to this type of scam of late, and one of the most recent victims was a 75-year-old man who thought he was helping out his granddaughter. He transferred his entire Christmas savings fund of £1,500 to help her but later discovered it had all been a scam.

Warnings from authorities

This latest scam has led to warnings from authorities, including Trading Standards as well as WhatsApp itself. Officials said that scammers would send convincing messages to family members and ask for things such as personal information, codes, or money to be transferred.

In this particular incident, the scammers contacted the father first with a message claiming to be from his daughter. The message said she had developed an embarrassing medical issue and needed money to get it sorted out. Eventually, it was the grandfather that decided to send the money.

The family did attempt to call the granddaughter, but the calls just went straight to an answerphone message. After the money had been transferred and it was too late, they realised that the whole thing had been a scam.

Speaking to the media, the grandfather said, "You feel such a fool. I was angry that I was able to be duped. You get used to these scam calls, but they are getting quite clever. I used to run my own business, so if they can fool people like me, a lot of very vulnerable people will be in trouble."

According to recent surveys, close to 60% of people have received scam messages in the past year. Many believe that younger age groups are more at risk because they converse more via messaging apps and text. However, scammers have been able to successfully target all age groups by posing as family members.

Brits express outrage over state pension increase

Older Brits have been expressing outrage over the state pension increase for next year, saying the government has broken manifesto promises by suspending the triple lock.

The state pension would have increased by an enormous 8.3% next year based on the triple lock. This was due to an anomaly with earnings growth caused by the pandemic and people returning to work after furlough. This would have cost the government around £5 billion, according to experts.

As a result, a decision was made to suspend the triple lock system for one year, which has led to the increase falling to just 3.1%. Some pensioners have described the increase as miserly, with others accusing the government of getting rid of the triple lock system because it no longer suited them.

Demands for the full increase

Pensioners were left disappointed by the Autumn Budget, with many feeling they had been left out in the cold by the Chancellor. The announcement of a much smaller state pension increase deepened the disappointment pensioners and those close to retiring already felt.

One pensioner, Stephen Harrison, said, “Put the triple lock back and we want the whole 8.3 percent increase or the 11 percent that the corrupt politicians gave themselves.” Another wrote, “Don’t worry, come election time we will not forget who robbed us, lied and gone back on a manifesto pledge.”

Many officials and charities have also expressed concern over the small state pension increase compared to what it would have been if the triple lock system had been kept in place. Some have stated that the 3.1% increase will not be adequate to cover the soaring cost of living for pensioners and could leave many facing poverty.

Some pensioners would have received up to £14 per week extra under the triple lock system, but this has now been vastly reduced. Speaking at the House of Lords recently, Baroness Natalie Bennett said, “When we're talking about £14 a week, there are a relatively small number of people in our society for whom £14 a week is small change. There are very large numbers of people and very large numbers of pensioners, for whom that's literally a matter of life and death.”

Survey shows many regretting impulse purchases during lockdown

According to a recent survey, many Brits are now regretting impulse purchases that they made during the Covid lockdown. With many forced to stay at home for long periods, bored consumers were splashing out on everything from the latest games consoles to hot tubs for the home. However, as normality slowly starts to return, many are now regretting their decisions.

The survey was carried out by insurance giant Aviva. Officials from the group said that many of these costly purchases were now no longer being used and were simply gathering dust in homes. The survey suggests that 10% of those who bought items for the home during lockdowns now wished that they had held off.

A range of items purchased

The data suggests that various items were purchased by consumers confined to their homes at various points in 2020 and the early part of this year. There was a surge in sales of certain items, including those designed to aid home fitness and those relating to home DIY and hobbies.

Among the purchased products were garden tools, exercise machines, entertainment systems and gaming consoles, kitchen appliances, furniture for the garden, and even musical instruments. Some admitted to spending close to £1,400 on purchases they now regretted.

As part of the survey, 4,000 people were polled, and the results revealed that some had already either sold their purchases on or had even given them away. Many said they made purchases with cash that would usually have paid for a holiday or going out, both of which they could not do because of the restrictions.

Customer and Marketing Director at Aviva, Nicki Charles, said, "So much has changed since the start of 2020. The way we work, how we interact with others, and it seems the contents of our homes too. Faced with weeks or months at home, many of us made purchases to entertain ourselves, often costing hundreds or even thousands of pounds."

Report warns of true cost of retirement housing in the UK

A recent report has warned of the dangers of retirees downsizing and moving to retirement homes, with many running into problems. In addition, the families of those in retirement properties have faced issues when their loved ones have died, as they have struggled to sell the property and been left with huge bills.

One case that was highlighted was that of Kathleen Smith, who died back in 2014. She lived in a retirement flat that she purchased for £124,000 in 2006, eight years before her death. However, her family has only just been able to sell the flat seven years after she passed away and has had to pay out close to £16,000 during that time to retain ownership of the property.

In addition to these issues, Kathleen's family only managed to get £60,000 for the flat, which meant they received £64,000 less than she had paid for it. With a non-retirement flat, the family would have avoided paying the services charges associated with retirement properties and benefited from the house price inflation seen over recent years.

Government urging older people to downsize

Concerns have arisen because government ministers are urging older empty nesters who are retired to downsize, but many of them are ending up in retirement properties that then become very difficult to sell and lose a lot of their value.

Housing officials have pointed out that retirement properties in the UK are not as popular as in other places such as the United States. Figures suggest that just 2% of over 65s in the UK live in retirement properties compared to around 12% in the USA.

Kathleen’s son Michael spoke about the issues that the family had faced after his mother passed away.

He said, “We found that nobody would touch this kind of property with a bargepole. The service charges are so high, and the market had been flooded with homes that were hyped when they were first sold at prices that must have been inflated. All over the country, people are losing huge sums of money as they find out that the flat their parents bought as an investment has plummeted in value.”

One industry official, Sebastian O'Kelly, founder of the campaign group Better Retirement Housing, said, “Retirement housing in the UK is a failure and the elderly are deeply — and rightly — sceptical about downsizing to designated retirement housing.

Image Credit: Hulki Okan Tabak at Unsplash

Reno Charlton
Reno Charlton
Reno joined Age Group in 2020 and has nearly 20 years of writing experience. Although she specialises in writing about finance topics and covering finance news, Reno is also a published author and has written several children's books and short stories.
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