At present, the state pension increases each year in line with the rising cost of living seen in the Consumer Prices Index (CPI) measure of inflation, increasing average wages, or 2.5 percent, whichever is highest. Average earnings have been the key part of the debate in recent months – official forecasts suggest that average earnings will be the highest of these three, by a considerable margin. Predictions by the Bank of England suggest that average earnings could go up by 8 percent.
This has sparked concerns that young people, who have suffered from unemployment or wage reductions during the COVID-19 crisis, may end up paying more for state pensions of older citizens.
As a result, Cabinet Ministers believe it would be “grossly unfair” for pensioners to benefit while national insurance is increased for workers, the Telegraph reported.
One told the newspaper: “It has got to go”.
Another Cabinet Minister said: “You are excluding the people who actually need this [social care reform] while hiking taxes on the young, so there is a difficulty in the optics of that.
A third said:…
