MILLIONS could lose out on thousands of pounds in state pension payments if the triple lock isn’t reinstated.
Liz Truss refused to commit to raising state pension payments in line with inflation from April 2023.
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The move could mean that those on the new state pension will miss out on as much as £12,296.94 over the next 20 years
And those on the basic state pension could miss out on £9,421 over the same period.
That’s based on calculations by wealth manager Quilter, and on payments rising by wage growth of 5% next year instead of the expected 10% inflation, and 2.5% in subsequent years.
Retirees were expecting to benefit from rising inflation after the government previously confirmed that the state pension triple lock will return next year.
The triple lock ensures that payments rise each year by whichever is highest of the three figures: inflation, wages or 2.5%.
Inflation fell to 9.9% in August after reaching a 40-year high of 10.1% earlier in July.
The Bank of England now predicts inflation will peak at 11% in October and then remain above 10% for a few months after.
Pensioners would be hundreds of pounds a year worse off a year without the triple lock.
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In April this year, payments increased by wages after the triple lock was suspended.
It saw payments rise by 3.1% pushing up weekly payments of the maximum new state pension to £185.15.
If inflation hits 10%, pensioners would see that weekly amount increase to £203.65 or £10,590.58 annually
Those receiving the basic state pension, worth £141.85 per week, would receive £156 a week with the same increase.
If the triple lock isn’t reinstated, pensioners could get a lower uplift of 5% based on wage growth.
That would mean the new state pension would increase to £190 or £9,928 a year – £691 less per year than if it was to rise with inflation.
The basic state pension would rise to £149 a week or £7,766 a year – £370 less per year than if it was to rise by inflation.
If pensions were to increase by 2.5% the weekly rate for those on the new state pension would rise to £185 per week or £9,896 per year.
For the basic state pension, it would rise to £145 per week or £7,582 per year.
David Denton of Quilter Cheviot said: “After last year’s increase of just 3.1%, pensioners will be seeing their spending power rapidly being swallowed up by rising inflation and many will be struggling to keep their heads above water.
“Keeping the inflation increase in place would provide a huge boost to pensioner income at a time when many are struggling.”
The government is yet to confirm whether it intends to reinstate the triple lock on pensions next April.
How much is the current state pension?
Your State Pension amount depends on your National Insurance record.
Check your State Pension forecast to find out how much you could get and when.
The full new State Pension is £185.15 per week.
You’ll be able to claim the new State Pension if you’re:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953
The full basic State Pension is £141.85 per week.
You’re eligible for the basic State Pension if you were born before:
- 6 April 1951 if you’re a man
- 6 April 1953 if you’re a woman
What other support is available to pensioners right now?
Millions of pensioners will get a £300 payment in October to help cover the rising cost of heating homes over winter.
Pensioners on the lowest incomes will get a £650 payment along with others on benefits like Universal Credit from July.
And those with disabilities could be eligible for a £150 payment.
Anyone struggling with higher bills or worried about debt can get help.
