State pension rising in less than a week but pensioners miss out on bumper increase
Pensions triple lock scrapped for millions of Brits
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The state pension is set to rise next week, providing pensioners with a welcome boost to their income during a challenging time. However, the state pension was on course to increase by a much larger percentage before the Government intervened.
On April 11, an increase of 3.1 percent will be applied to the state pension.
This means recipients of the full new state pension will receive an additional £5.55 a week, or £288.60 for a full year.
The full basic state pension will increase by £4.25 a week, or £221 for the year.
While the extra income will provide some relief for struggling pensioners, it is significantly less generous than they were expecting.
Pensioners had been in line for an increase of more than eight percent to their state pension, but changes to the triple lock policy prevented this.
This would have been by far the biggest increase to the state pension since the introduction of the triple lock policy.
Inflation currently sits at a massive 6.2 percent in the UK, and a state pension increase of eight percent or more could have helped pensioners maintain their spending power despite the surge in the cost of living.
But with the state pension increase cut down to 3.1 percent under the temporary double lock, the income of pensioners will only rise by half the rate of inflation.
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With the energy price cap increasing from April 1, many pensioners could continue to struggle to make their income stretch far enough.
The triple lock policy was brought in to help pensioners maintain their spending power over time by ensuring the state pension increases every year.
Under the terms of the policy, the state pension must increase by at least 2.5 percent each year.
It can rise by more than that if either the rate of inflation or average earnings growth is higher.
An unusually high rate of earnings growth, believed to be triggered by a large number of people returning to work from the furlough scheme, set the state pension on course for a huge increase.
However, the Government decided to remove the earnings link from the triple lock for the 2022/23 tax year, reducing the state pension increase down to 3.1 percent, in line with inflation as of September 2021.
By making this decision, the Government broke a manifesto pledge from 2019.
The subsequent surge in inflation has dwarfed the 3.1 percent rise.
The Government has stated the triple lock will be reintroduced in full for the 2023/24 tax year, offering a glimmer of hope for pensioners.
If inflation continues to rise in the coming months, it could mean the state pension rises by a significant amount from April 2023.
Based on the current rate of inflation, the full new state pension could rise by more than £11 a week next year.
This could mean pensioners receiving nearly £600 in additional state pension in the 2023/24 tax year.
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