Pensioners to get 10% pay rise next year as Rishi Sunak confirms return of triple lock

MILLIONS of retirees are on track for a pay rise of nearly £1,000 next year.

The government has confirmed that the state pension triple lock will return next year.

Chancellor Rishi Sunak yesterday said that the mechanism for calculating the benefit's rise will return as he announced a raft of help for hard-up households.

He said: "Benefits will be uprated by this September’s CPI which, on current forecasts, is likely to be significantly higher than the forecast inflation rate for next year.

"Similarly, the triple lock will apply for the state pension."

The triple lock means the pension payments will rise in 2023 by whichever is highest: earnings, inflation or 2.5%.

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The state pension could rise by as much as 10% as inflation is expected to continue rising this year.

The calculation for the annual rise to the the old age benefit was temporarily suspended because of the pandemic and was reduced to a double lock.

Wage growth was removed from the uprating because the coronavirus skewed wage data that would have given pensioners a bumper pay day.

Instead the state pension rates increased by inflation of 3.1% in April, based on last year's inflation figures.

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But inflation is currently far higher at 9% leaving pensioners worse off in real terms.

Prices have since shot up including food, fuel and energy costs.

The maximum new state pension amount is now £185.15 and could rise to £203.67 a week in 2023.

If inflation hits 10% as experts predict it could push up state pension payments by an extra £18.52 a week – or £962.78 a year.

A rise would also push up pension credit amounts for the most hard-up pensioners.

But those living off the state pension face a tough wait until the benefit "catches up" to current inflation rates.

The energy price cap increased by 54% in April adding hundreds of pounds to bills.

And it will increase further this winter, with  Ofgem warning that the price cap could rise by another £800 in October, taking the average dual fuel bill to £2,800 a year.

Around 22million households are currently on price capped tariffs as fixed deals are now far higher following a steep increase in wholesale energy costs since last year.

The energy price cap limits how much suppliers can charge for standard tariffs per unit of energy.

The typical dual fuel bill is now £1,971 subject to the price cap, up from £1,277, though exactly how much you pay depends on usage.

Mr Sunak announced a package of support that will see pensioners get one-off payments worth hundreds of pounds between now and next years state pension rise.

Millions of pensioners will get a £300 payment in October to help cover the rising cost of heating homes over winter.

Pensioners on the lowest incomes will get a £650 payment along with others on benefits like Universal Credit.

And those with disabilities could be eligible for a £150 payment.

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Anyone struggling with higher bills or worried about debt can get help.

There are plenty of organisations where you can seek advice for free, including:

  • National Debtline – 0808 808 4000
  • Step Change – 0800 138 1111
  • Citizens Advice – 0808 800 9060

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