State pension triple lock – Liz Truss urged to ‘reaffirm promise’
Pensions triple lock scrapped for millions of Brits
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The absence of the state pension triple lock this year has given older people cause for concern. The measure usually sees the state pension increase by whichever is the highest of 2.5 percent, inflation or average earnings.
However, it was temporarily scrapped this year due to warped earnings data as a result of COVID-19.
Pensioners originally expected an estimated eight percent rise this year, but were left with 3.1 percent under a double lock system.
It left many sceptical about whether the policy would return in the future.
New Prime Minister Liz Truss, however, has previously expressed her support for the return of the policy for the remainder of Parliament – the next two years.
With inflation at high levels, it is expected state pensioners will receive a bumper boost this year, potentially a double-digit percentage.
Many see this week’s emergency mini-Budget as a chance for the Prime Minister to reaffirm her commitments to provide support to older people.
Tom Selby, head of retirement policy at AJ Bell, said: “Liz Truss pledged to retain the state pension triple lock during the Conservative leadership contest.
“This is a promise which will almost certainly see the full state pension rise beyond £10,000 per year in 2023.
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“The mini-Budget gives the new Prime Minister’s Government the opportunity to reaffirm that promise and shore up support among older voters.”
Mr Selby highlighted the decision to temporarily scrap the triple lock this year was a lucrative one for the Government.
It saved the Treasury approximately £5billion, beneficial for the Government in a time of financial challenge and strain.
However, inflation remains high and all eyes are on September CPI inflation as this is how the state pension for April 2023 onwards is likely to be measured.
Mr Selby continued: “A 10 percent rise in the value of the full state pension would increase the benefit from £185.15 per week to £203.65 per week.
“This is almost £10,600 a year.
“It would likely cost the Treasury over £10billion – a hefty price tag even in the context of the huge Government support packages we have seen in recent years.”
The Prime Minister is likely to come under pressure to water down the triple lock, other experts have suggested.
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For some, the inflationary pressure is considered to be too much to sustain triple lock increases.
Carl Emmerson, of the IFS, told The Telegraph: “The triple lock is expensive over the long run and therefore will need to be ditched at some point.
“CPI indexation of the state pension in April 2023 and April 2024 – which will be a big cash increase – is defensible.
“It is just a question of whether the resulting increase in the state pension as a share of earnings should be locked in permanently.
“This is clearly not sustainable.”
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