UK

Pensioners in line for biggest pay rise on record – after Liz Truss confirmed triple lock

The triple lock was first broken by former Chancellor Rishi Sunak in September last year, after a large rise in wages following the end of the pandemic restrictions.

The state pension should have risen by 8.1pc in April 2022 but the Treasury opted only to increase the payment by the 3.1pc inflation figure. 

“As such, there is a precedent that they could say inflation is unusually high and choose to discount it – a move that would seriously damage pension income for years to come,” Mr Denton said.

“Thanks to last year’s disappointing increase, pensioners will now be seeing their spending power rapidly swallowed up by soaring inflation and many will be struggling to make ends meet,” he added.

Ms Truss had previously said she would uphold the triple lock, which the Conservative party promised in its 2019 manifesto

However, comments this week have cast doubt on the pledge. When asked in the House of Commons to reaffirm the Government’s commitment to the triple lock, Mr Hunt said that while he was aware of how many vulnerable retirees there are, he would not make “any commitments to individual policies”. 

He added: “Every decision we make will be made through the prism of what matters to the most vulnerable.” 

Steve Webb, a former pensions minister and now partner at LCP, a pensions consultancy, warned of a double blow. “Breaking the triple lock could cost a single pensioner £442 per year. A reduced pension rise, combined with a cut in help on energy bills, could be part of a ‘double whammy’ for millions of pensioners,” he said.

Half of pensioners rely on the state-paid benefit as their main source of income, according to the pension provider Royal London.

Caroline Abrahams, of charity Age UK, said removing the triple lock would be “devastating” for millions of older people at a time when food and energy prices are soaring.

“Knowing their state pension would keep pace with rising prices because of the triple lock has given precious hope to many older people at a time of great anxiety. For the Government to take that away from them now would be a hammer blow, as well as a flagrant breach of trust,” she said.

But experts have warned that the triple lock policy could be under threat as the new Chancellor seeks to balance the nation’s books. Estimates from the Office for Budget Responsibility suggest that every percentage point increase in the state pension costs the Treasury around £1bn. Quilter estimated a 10.1pc rise in pension payouts would cost the Exchequer £9.59bn in the next financial year.

The triple lock has become a source of intergenerational tension, as younger workers’ wages have been vulnerable to the erosive impact of inflation. From June to August, real regular pay fell by 2.9pc year-on-year.

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