Chancellor Jeremy Hunt has confirmed the government will “honour its commitment” to the triple lock in full by increasing the new state pension by 8.5 per cent in April.
In the Autumn Statement today (November 22), Hunt said: “There have been reports we would uprate [the triple lock] by a lower amount to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for 1mn pensions whose only income is from the state.
“So instead, today we honour our commitment to the triple lock in full.”
The ‘new’ state pension will increase from £203.85 per week to £221.20 per week (£11,502.40 per year).
The ‘old’ state pension (paid to those who reached state pension age before 6 April 2016) will increase from £156.20 per week to £169.50 per week (£8,814 per year).
“This is one of the largest ever cash increases to the state pension, showing a conservative government will always back our pensioners,” Hunt said.
“Including today’s measures, our total commitment to easing cost of living pressures has risen to £104bn.”
Hunt said the triple lock – which increases state pension by the highest of inflation, wage growth or 2.5 per cent – has helped lift 250,000 older people out of poverty since it was introduced by a Conservative government in 2011.
“It’s been a lifeline for many during a period of high inflation,” he said.
Tom Selby, head of retirement policy at AJ Bell, said: “Retirees will receive an inflation-busting state pension increase next year after Jeremy Hunt confirmed the government’s ‘triple-lock’ pledge will be fully applied in April next year.
“With CPI inflation now at 4.6 per cent and anticipated to continue falling into 2024, today’s announcement represents a serious boost in spending power for millions of pensioners.”
Selby said there had been suggestions the Treasury was considering arguing NHS bonus payouts had inflated July’s earnings figure and instead opt for the lower 7.8 per cent figure, which strips out bonuses.
“This could have saved the Exchequer somewhere in the region of £1bn but would also have left the chancellor open to the accusation of shifting the state pension goalposts,” Selby said.
“Given where the Conservatives find themselves in the polls and the fact older people hold huge sway at the ballot box, it is hardly surprising they opted to target fiscal restraint elsewhere.”
Last month, there were rumours that the triple lock could cost the Treasury £8bn and therefore could see the government increase it by a lower amount.
Earlier this month, a petition was also launched calling for the government to honour the triple lock in full in April 2024.
The history of the triple lock
The triple lock was introduced from April 6, 2011 and means the basic state pension and single tier state pension increase by the highest of earnings, inflation (CPI) and 2.5 per cent.
Andrew Tully, technical services director at Nucleus, said: “The large increase in the state pension from April 2024 will be a welcome boost to the many people who are struggling given the current cost of living crisis.
“The last couple of years has taken its toll on finances, with many having to make difficult choices to make ends meet.
, 2023-11-22 23:50:22 ,
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