State pension rise ‘won’t happen’ as triple lock uncertain

Pensions triple-lock ‘right thing to do’ says Altmann

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The triple lock is the promise made by the Government to increase the state pension by either inflation, 2.5 percent or earnings. Whichever is the higher figure will be used to determine the payment rise for peoples’ retirement amount. Following a year-long suspension of the triple lock, pensioners are anxiously waiting to see to see how much their payments will increase by.

The Consumer Price Index (CPI) rate of inflation for September returned to a 40-year high of 10.1 percent.

September’s figure is often used to determine the rate hike for benefit payments, including the state pension through the triple lock.

This would result in pensioners seeing their payments rise to over £200 per week if the triple lock was reinstated.

Despite past promises from Boris Johnson and Liz Truss, the new Prime Minister Rishi Sunak has avoided confirming whether it will return or not.

All eyes will be on Chancellor Jeremy Hunt’s Budget announcement later this week which will likely provide some clarity as to whether the triple lock will be making a comeback.

However, Mr Hunt has issued a warning that the Government will be making tough decisions as it looks to balance the books.

The UK is in the midst of a cost of living crisis following the COVID-19 pandemic and the war in Ukraine.

One of the ways analysts believe the Government will cut spending is by prolonging the suspension of the triple lock a year longer.

Ray Black, the managing director of chartered financial planning firm Money Minder, noted further “restrictions” to state pension payment increases could still be on the board for the Government.

Mr Black said: “It is highly likely that our new Prime Minister will use the Autumn Statement to steady the ship in an attempt to repair the recent adverse press that the Government has been attracting in how they manage the economy going forward. 

“Therefore, we might see some continued restrictions on state pension increases in April, higher taxes and more controversially, higher National Insurance contributions. 

“Pensioners are, like much of the population, quite worried about the rising energy and food costs in the coming months. 

“Even with the Government’s announcements of financial support, it could make it a very tough winter for many, especially for those who are already struggling to make ends meet.”

The financial expert noted there is a growing likelihood that the triple lock could be scrapped as “austerity” measures could soon be on the horizon.

He added: “Hopefully, on November 17, we will find out if the new Prime Minister Rishi Sunak plans to follow through with the previous PM’s promise to reinstate the pensions ‘triple lock’.

“Potentially, this could increase the newer flat rate pension to over £200 per week.

“However, it’s very possible that won’t happen now as the PM and the Chancellor concentrate on reducing borrowing costs and repairing the Government’s balance sheets.

“In my opinion, it’s quite possible that the use of the word ‘austerity’ could once again become quite commonplace in the short term.”

Currently, the full new state pension is £185.15 per week while the full basic pension is £141.85 per week.

Jeremy Hunt is set to announce his Autumn Budget later this week on November 2, 2022.

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