Sturgeon says the removal of the triple lock is 'disgraceful'
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The state pension rises each April to help pensioners keep up with the cost of living. However, after changes to the triple lock led to a cut-price increase for 2022, there are concerns something similar could happen next year.
From April 2022, the state pension will increase by 3.1 percent.
This will take the full new state pension from £179.60 to £185.15 per week, adding £288.60 to the yearly value.
The full basic state pension will rise from £137.60 to £141.85, which means an additional £221 for the year.
However, pensioners would have received a far bigger increase to their state pension had the triple lock policy been honoured as normal.
The triple lock policy ensures the state pension increases each year by the highest of three figures:
- The rate of inflation
- Average earnings growth
- 2.5 percent
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Using these parameters, the state pension was set to rise by 8.1 percent for the 2022/23 tax year, due to a high rate of earnings growth.
This was until the Government determined this figure was being inflated by a large number of Britons returning to work after previously being on furlough leave.
They therefore took the decision to temporarily remove the earnings link from the triple lock policy for one year.
Had an 8.1 percent increase been implemented, pensioners receiving the full new state pension could have received an extra £756 in yearly income.
This would have been well more than double the increase they will now get as a result of the triple lock suspension.
However, as inflation has continued to soar since the 2022/23 state pension rise was locked in back in September 2021, there has been some hope that pensioners could receive a bumper rise to their state pension next year instead.
Inflation has recently hit a 30-year high and currently sits at 5.5 percent.
The Bank of England has predicted that by April, the rate could hit eight percent.
If inflation maintained at that level through to September 2022, it could mean the state pension increase for the 2023/24 tax year would be set at the same rate.
This could give pensioners an extra £770 in state pension next year, if the triple lock is reinstated in full as was the Government’s original intention.
But speculation has now begun that the Government may opt to suspend the triple lock once again next year due to the projected expense of paying out such a large increase.
Emma Watson of Rathbone Investment Management has dubbed the triple lock a “very expensive and unlikely promise to keep”.
A Government spokesperson said: “We plan to return the earnings element of the Triple Lock next year.
“The one-year move to temporarily suspend the Triple Lock ensures fairness for both pensioners and taxpayers. Combined with last year’s 2.5 percent increase to pensions – a step we took when earnings fell and inflation barely rose – we have ensured pensioners’ incomes have been protected.”
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