The Treasury is expected to save £350m in 2010/11 compared with the cost if the rise had applied to all parts of the state pension. Pensions minister Angela Eagle has confirmed so-called extras such as the state earnings-related pension would be frozen and claimed it was to prevent unfairness between Serps and company pension schemes.
In his pre-Budget report , Darling said: “The basic state pension will not be frozen but will rise by 2.5 per cent in April.”
Conservative Shadow Treasury Chief Secretary Philip Hammond says: “As always with this Government, the headlines of their announcement unravel when we see the small print. The pensions minister has revealed Alistair Darling’s 2.5 per cent rise will not actually apply to all pensioners.
“This year’s PBR has been the most political and cynical of Labour’s term in office. Now we see the cruel deceit of pensioner and benefit recipients who were given false hope on Wednesday, only to have their expectations dashed by Saturday.”