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The new inflation estimates show that retirees will also experience real growth this year. The pension association is doubtful about the numbers and looks even darker next year.
Heidi Nordby Lunde (H) says that lower-than-expected price growth this year means that pensioners don’t lose purchasing power anyway.
Terje Pedersen / NTB
- NTB-Birgitte Iversen and Eirik Husøy
Published:
When the state budget was released on Wednesday, adjusted estimates of wage and price growth for this year were also presented. They show that pensioners will not yet lose purchasing power in the current year.
This year, pensions increased 1.2 percent through regulation in the social security agreement. If inflation grows just 1.1 percent this year, as the Finance Ministry now assumes, pension adjustments will result in weak real growth of 0.1 percent.
This means that pensioners have received real pension growth for two years in a row, before tax breaks and additions to minimum pensioners have been included, Heidi Nordby Lunde, Conservative Party spokesperson for labor policy, tells NTB.
Following the social security deal earlier this fall, it was widely reported that retirees will likely have less to spend, which the government questioned. According to a fact check by Faktisk.no, the claim that retirees had less to do for the fifth time in six years was also rejected.
– Everything that counts
Low wage growth, mainly due to the oil crisis, has resulted since 2014 in low real growth for both retirees and employees.
– This was reversed last year, which gave weak real growth to all. Now, new calculations show that this will hold true this year, Lunde says.
She says that tax cuts, reduced reductions in basic pensions and special allowances for single minimum pensioners, as well as reductions in pensions for cohabitants and married pensioners mean that pensioners’ finances they have become even stronger in recent years.
– The decisive factor is how much you have left when the pension is regulated and the tax is paid. It’s all that counts, says Lunde.
Skeptical of estimates
However, the Pensioners Association, which is the country’s largest organization for pensioners and people with disability benefits with 250,000 members, does not take the new estimates for good fish.
– If prices increase less than expected, it is positive for the purchasing power of both pensioners and employees. But we must say that we are quite surprised that the Ministry of Finance estimates a price increase of only 1.1 percent in 2020. This differs greatly from the price increase estimates that both Statistics Norway and Norges Bank have presented relatively ago. a short time, says the leader of the Association of Pensioners Jan Davidsen to NTB.
It notes that Statistics Norway estimated a price increase of 1.5 percent on September 11, and that Norges Bank estimated a price increase of 1.6 percent on September 24.
The union leader of the Pensioners Association, Jan Davidsen, is skeptical of the new estimates of price growth this year and believes that next year could be the worst in many years for pensioners.
Heiko Junge / NTB
Scared next year
In addition to what they believe there is still a lot of uncertainty about this year’s deal, the Pensioners Association is very concerned about next year. They believe that the purchasing power of the country’s retirees is likely to weaken by two percent in 2021.
According to national budget estimates, pensions will increase by 1.4% in 2021, while prices will increase by up to 3.5%. This will give pensioners negative real growth of 2.1%. For wage earners, a decrease in real wages of 1.3 percent is estimated.
– It may be the worst financial year since the pension reform was introduced, says Davidsen.
According to the estimates of the Pensioners Association, an average pension of the National Insurance Plan of NOK 250,000 will see its purchasing power reduced by NOK 5,000.
– It is going to be a terrible year for pensioners, unless measures are taken on the regulation of pensions, says Davidsen.
