State pension is set to rise by bumper 10% as return of triple lock is set to ease pressure on OAP purses
- Sunak promised an inflation-busting uplift to older people with bumper pension
- The triple lock ensures state pension will rise each year – in line with either average wage growth, inflation or by 2.5 per cent – whichever is highest
- He told MPs that benefit recipients will receive increases in payments next year
Older people are in line for a bumper state pension next year after Rishi Sunak promised an inflation-busting uplift.
As he pledged the return of the triple lock – which protects the level of the allowance – the Chancellor said pensioners should be ‘reassured’ that 2023 will bring an ‘enormous easing’ in their finances.
Yesterday Mr Sunak told MPs that benefit recipients will also receive increases in payments next year.
He said benefit and pension rates from April next year will be linked to the inflation rate in September 2022.
Based on current forecasts, inflation is expected to reach 10 per cent this year and then fall in 2023, meaning that when the rises are introduced they will be higher than the rate of inflation.
The Chancellor told MPs the increases would help households deal with soaring prices and the rise in energy bills.
Mr Sunak said: ‘I can reassure the House that next year, subject to the review by the Secretary of State for Work and Pensions, benefits will be uprated by this September’s consumer prices index, which on the current forecast is likely to be significantly higher than the forecast inflation rate for next year. Similarly, the triple lock will apply to the state pension.’
Relief: Pensioner Mick Thompson, 67, and his wife Nix, 58, pictured at their home in Cornwall. They expect to receive around £850 to help ease the squeeze on their finances
The triple lock – a Tory manifesto commitment – ensures the state pension will rise each year in line with either average wage growth, inflation or by 2.5 per cent – whichever is highest.
Last September the Government confirmed it would suspend the triple lock for one year amid huge controversy. The move followed concerns that a post-pandemic rise in average earnings would have resulted in pensions increasing by 8 per cent.
Earnings soared over the year after falling the year before during the Covid lockdowns.
The suspension was introduced despite Boris Johnson promising in his 2019 election manifesto to maintain the triple lock formula.
And it came just hours after the Prime Minister breached another manifesto commitment by increasing national insurance to fund health and social care. Yesterday Mr Sunak told financial expert Martin Lewis that many Britons should be ‘reassured’.
He said: ‘Benefits and pensions next year are likely, subject to a review which has to happen legally, to go up by quite a significant amount, because the inflation rate that decides that is set in September. That’s likely to be a relatively high inflation rate in September, and that increase is most likely to be significantly higher than the inflation that we will see next year on all the forecasts available.
‘So that should give people an enormous sense of reassurance that we’re announcing the help today to get them through to that point and then next year there’s going to be an enormous easing as all of their incomes go up considerably compared to the increase in prices.’
Rishi Sunak promised an inflation-busting uplift in the Commons on Thursday (pictured). As he pledged the return of the triple lock – which protects the level of the allowance – the Chancellor said pensioners should be ‘reassured’ that 2023 will bring an ‘enormous easing’ in the UK’s finances
Earlier, the Chancellor announced further help for pensioners to cope with the cost of living crisis.
He said pensioners who receive the winter fuel payment will also get a one-off ‘cost of living payment’ of £300. Mr Sunak said: ‘Many pensioners are disproportionately impacted by higher energy costs.
‘They cannot always increase their income through work and, because they spend more time at home and are more vulnerable, they often need to keep the heating on for longer.
‘We estimate that many people who are eligible for pension credit are not currently claiming it, which means many vulnerable pensioners will not be receiving means-tested benefits.’
He added: ‘I can announce today that, from the autumn, we will send over eight million pensioner households that receive the winter fuel payment an extra one-off pensioner cost of living payment of £300.’
‘Support welcome but it will not go very far’
By Fiona Parker, Money Mail Reporter
A pensioner has said it is ‘a relief’ to hear of the extra help which includes the return of the state pension triple lock next year.
Mick Thompson, 67, and his wife Nix, 58, expect to receive around £850 to help ease the squeeze on their finances.
Mr Thompson said: ‘It was a relief to hear about the help because it meant we weren’t going to be heading to Armageddon. Without any help we would have been.’
He described the return of the triple lock on pensions as ‘great’, adding: ‘I was really angry when it was frozen – my pension only went up by £14 this year.’ However he noted that the additional support could have gone further and said of his pension: ‘It will only end up being a 4 per cent increase, when it should have been 8 per cent.’
The former hotel owner said he and his wife are now spending twice as much on oil to heat their bungalow in Cornwall, setting them back by £1,200 over the past year. And their electricity bills have increased from £75 to £206 a month following the collapse of their supplier Zebra in November.
Mrs Thompson, who is unable to work due to a tendon condition, receives a £464 per month personal independence payment. Mr Thompson’s pension amounts to £626 a month. This means their energy bills alone now take up around a fifth of their entire household income.
Mr Thompson, a father of two, added: ‘While I welcome the help, it will only really cover the increased cost of our oil.
‘It will not go very far in addressing our electricity bills.’
‘Middle-earners are always hit’
By Tilly Armstrong
Married mother-of-three Maria Bailey, pictured at her home in Paignton, Devon, is grateful for the extra help but is worried about escalating costs over winter
Married mother-of-three Maria Bailey is grateful for the extra help but is worried about escalating costs over winter.
‘We’ve got a false sense of security at the minute as we’re in the summer months, so the heating isn’t on,’ she says.
The 45-year-old stay-at-home mum, pictured, who lives with husband Luke, 48, in Paignton, Devon, runs a grief counselling service and offers courses online.
Since their energy supplier Avro went bust, the family’s energy bills have doubled to £200 a month. And their estimated annual bill has jumped to £2,900 a year. Mrs Bailey is now trying to increase her household income. She has even considered downsizing to tackle rising costs, as it would reduce the mortgage repayments and a smaller property would be cheaper to heat.
Mrs Bailey says the £400 discount on energy bills in October will help, but describes it as ‘a one-off hit and not a long-term solution’.
She added: ‘As middle-earners we always get squeezed. We’re not poor enough to warrant help and we’re not rich enough to do more than get by.’
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