Wealthy pensioners should consider paying back the extra £ 1,000 that comes from an inflation-dependent increase in the state pension, the minister overseeing the policy has said.
Thérèse Coffey, the Labor and Pensions Secretary, said on Wednesday that it was “very straightforward” to return the money to the government as she rejected criticism of the increase.
The remark came after Lord Clarke, the former Tory chancellor, said the government’s focus should be on the poor rather than affluent pensioners like himself.
Downing Street and the Treasury Department are facing a new investigation into theirs decision to increase the national pension and benefits of inflation, but refuses to do the same for public sector wages – an attitude that has partly led to the railway strikes this week.
Chancellor Rishi Sunak defended the position, saying wage increases were more likely to push inflation up than pension increases. He argued that companies paying higher wages could again raise their own prices, known as a “wage spiral”.
The Prime Minister’s spokesman also doubled the position, saying it would be “ruthlessly” giving public sector wage increases in line with inflation and claims that the same people would suffer if it stuck in steep price increases.
The inflation forecast hits 11 per cent
On Wednesday, it was announced that inflation in May was 9.1 percent according to the Office of National Statistics, up from nine percent in April. It is expected to hit 11 percent this year.
The spokesman declined to say whether the increase in the state pension in April next year – which could amount to a further £ 10 billion in Treasury spending – would boost inflation.