Response to 2025 Budget Statement

Responding to the Chancellor’s budget statement, Older People’s Commissioner for Wales, Rhian Bowen-Davies, said:

“A number of aspects of the Chancellor’s statement are to be welcomed, including her announcement that the State Pension will increase by 4.8%, meaning that the New State Pension will increase by £575 a year from April 2026.

“However, it is important to recognise the majority of older people in Wales do not qualify for the New State Pension and will see far smaller increases in cash terms. Furthermore, these increases only ensure that the State Pension stays broadly in line with prices, which continue to rise rapidly.

“I also welcome confirmation that older people whose only source of income is the State Pension will be exempt from having to pay income taxes due to freezes in tax thresholds, a concern that has been raised with me by a number of individuals.

“The consequential funding for Wales that will result from the Chancellor’s announcements on funding for public services will enable increased spending in key areas such as health and social care, while other welcome measures include exempting over 65s from changes to ISA arrangements, reflecting the preference of many older people to invest using cash, as well as action to address shortfalls in industrial pensions.

“Looking at the budget more broadly, I welcome the announcement that the ‘two child limit’ is being removed, a measure that will lift over half a million children out of poverty according to the IFS. Poverty causes significant harm and investing in tackling this long-standing issue will benefit individuals and society more widely.

“However, I would have liked to have seen the Chancellor being bolder in terms of tackling poverty more widely, such as through ending the Pension Credit ‘cliff edge’, which means older people can miss out on support worth thousands of pounds a year, or announcing significant investment in energy efficiency, crucial to reduce the harm caused by fuel poverty.

“As highlighted in my Older People in Poverty in Wales report, published earlier this week, action in Wales and Westminster is crucial to ensure older people who are struggling financially can access the support they need, and this is something I will continue to call for as Commissioner.”