MILLIONS could see their State Pension rise by over £972 a year next year – but only if the triple lock isn’t axed.
The amount that people get in retirement usually rises each year – and how much it goes up by is determined by the triple lock calculation.
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But Liz Truss has refused to commit to keeping it in place – and around 12million retirees face losing a huge state pension boost if it is axed.
The triple lock was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- Earnings – the average percentage growth in wages in Great Britain
- Prices – the rising cost of living in the UK, as measured by the Consumer Prices Index (CPI)
- 2.5%
Usually, its inflation figures from September which are used for the triple lock calculation.
These were released today, and showed that inflation has now returned to a 40-year high of 10.1%.
If the triple lock is kept in place and state pension rates go up by 10.1%, the maximum new state pension would rise from the current rate of £185.15 to £203.85
It means pensioners would get a total of £10,600 a year – a £972.40 increase – when new rates roll out in April next year.
While the basic state pension would up £14.35 from £141.85 per week to £156.20.
Over the year, that would be an increase of £746.20 to £8,122.40 in total.
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But whether or not the government decides to keep the popular triple lock policy in place is resting on a knife edge, as Liz Truss re-evaluates her money policy promises in a battle to save her career.
Keeping the lock in place would cost £4billion to £5billion, according to AJ Bell figures.
AJ Bell head of retirement policy Tom Selby said: “The difference this decision will make to people’s state pension incomes from next year will be massive.
“Someone receiving the full flat-rate state pension would receive £8.50 per week less, or £442 over the course of the year, if average earnings rather than inflation is used to uprate their benefits.”
While Hargreaves Lansdown senior pensions and retirement analyst Helen Morrisey said axing the triple lock boost would be a “bitter blow” to millions of pensioners.
She said: “Faced with a black hole in Britain’s finances Jeremy Hunt is looking at making savings wherever possible and suspending the triple lock could save him a huge chunk of change -it will however be a disaster for pensioners already facing difficult times.”
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.
