The move will cost pensioners on the new State Pension a staggering £486 over the next 12 months, says the Express
From April, State Pension will increase by £700 for all Brits. Millions of people currently rely on their pension, according to the Department for Work and Pensions (DWP).
Rishi Sunak has already axed the triple lock mechanism this year – a move which could cost all pensioners £500 each.
The same could be done next year if he believes pensioners are being paid too much.
The triple lock increases the State Pension either by inflation, earnings or 2.5 per cent, whichever is higher.
If Sunak had implemented this from April, pensioners would have received a pay rise 8.3 per cent, in line with earnings.
Instead, the Department for Work & Pensions (DWP) said it would ‘temporarily suspend’ the earnings element of the triple lock, blaming ‘skewed and distorted’ figures due to the pandemic.
The move will cost pensioners on the new State Pension a staggering £486 over the next 12 months, says the Express.
There are growing fears that Sunak could tamper with the triple lock again as inflation skyrockets, with the Bank of England now predicting price growth of 7.25 per cent in April.
Increasing the State Pension in line with that would protect pensioners against the cost of living squeeze, but at a huge cost to the Treasury.
From April 6, the full basic State Pension will rise by £5.55 to £185.15 a week. If that was increased by 7.25 per cent in April 2023, it would climb to £198.52 a week.
That’s a rise of £13.42 a week – which adds up to almost £700 a year.
The actual increase will be based on this September’s inflation figure, which could be even higher than 7.25 per cent as prices rocket.
Yet pension experts fear the Government could claim inflation has also been ‘skewed and distorted’ by the pandemic, and use this as an excuse to axe the triple lock again.
Becky O’Connor, head of pensions and savings at Interactive Investment, said the Government has already set a precedent by scrapping the triple lock once. Now the stable door has opened, it is possible to imagine it happening again.
She added: If the Government decided the inflation figures were too high to use for the next State Pension uprating in 2023/24, we now know that it can simply decide not to use them.