Pensions triple lock scrapped for millions of Brits
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The state pension is set to rise in April, but pensioners will not receive as much as they previously expected. Changes to the triple lock policy mean a more modest increase.
Pensioners across the UK had been due to receive a boost of up to £756 to their state pension, but will now get less than half that.
This is due to the state pension triple lock being temporarily suspended for the 2022/23 tax year.
The triple lock is a Government promise that pensioners will receive an annual uprating to their state pension income.
Under the terms of the policy, the state pension must increase each year by the highest of three figures.
These figures are:
- The rate of inflation
- Average earnings growth
- 2.5 percent.
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Average earnings grew by 8.1 percent last year, which was by far the biggest figure of the three triple lock prongs.
An 8.1 percent increase to the state pension would have been by far the largest in the history of the triple lock.
However, the Government decided to temporarily remove the earnings link for the upcoming tax year as they believed it was being artificially inflated by people returning to work from the furlough scheme.
Therefore, the next-highest figure was used to boost the triple lock. This was inflation, which came in at 3.1 percent for the year to September 2021.
Pensioners will miss out on potentially hundreds of pounds this year as a result.
The full new state pension is currently worth £179.60, providing £9,339.20 for a full year.
This is paid at a higher rate than the basic (old) state pension, which has a maximum level of £137.60 per week, or £7,155.20 for the year.
The basic state pension is paid to Britons who reached state pension age before April 6, 2016.
If the triple lock had been honoured in its usual way this year, the full new state pension would have risen to £194.15 a week, but instead it will be £185.15.
This means over the course of a year, pensioners could miss out on an extra £468, as the full state pension increases by £288.60 instead of £756.60.
Following the state pension increase being locked in at 3.1 percent, inflation has continued to rise to eye-watering levels, leading to concerns over pensioners’ ability to keep up with the cost of living.
The latest inflation figure for the year to December 2021 was 5.4 percent, the highest number in 30 years.
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