(11 October 2021) When the rising cost of goods and services is taken into account, the State Pension is worth €542 per year less at the end of 2021 compared to January 2019*. In January 2019, the rate of the State Pension was €248.30. This has not changed since, while the Consumer Price Index has risen by 4.3% due to increases in the cost of goods and services to consumers. In advance of Budget 2022, Age Action has reiterated its call for the Government to demonstrate its commitment to the State Pension in Budget 2022 by increasing the rate by €15 plus a proportionate increase in income thresholds used for eligibility for the Medical Card and other means-tested services.
Nat O’Connor, Senior Public Affairs and Policy Specialist at Age Action said “The spending power of the State Pension has gone down by €10.24 per week, or €542.72 per year. That has a real impact on older people who rely heavily on the State Pension. The €542 lost through inflation is the equivalent of losing the ability to pay for a tank of home heating oil, keeping an older car on the road or paying for minor home repairs. It is essential that the State Pension provides an adequate income, which is why Age Action continues to call for a comprehensive study into the cost of living experienced by older people.”
According to the Minimum Essential Standard of Living research by the Vincentian Partnership for Social Justice, a pensioner living alone needs to spend between €56.63 and €59.18 per week to afford a healthy diet.
O’Connor continued “The erosion of the State Pension by €542 per year due to inflation is the equivalent of losing the ability to afford more than nine weeks of groceries. At the same time, the Survey on Income and Living Conditions indicates that an estimated 90,000 older people – one in nine – cannot afford a protein-rich meal with meat, fish or equivalent every second day. There is a widening gap between the State Penson and the cost of living for many older people, and it is essential that the Government addresses this in Budget 2022 next Tuesday.”
The value of the State Pension is now 28.9% of average earnings, which is €43.84 below the recommended target of 34% **of average earnings. In its Pre-Budget Submission, Age Action argued for a €15 increase in the State Pension, in Budget 2022, building towards the 33% benchmark over 3 years.
*(assuming 53 weeks, to include the Christmas bonus week)
** Press release updated on 11/10 to state 34% benchmark rather than 33% benchmark