State pension triple lock may be confirmed by Jeremy Hunt today

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Mel Stride responds to questioning on pension triple lock plans

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The triple lock sees the state pension increase each year by whichever is the highest of 2.5 percent, inflation or average earnings. However, the policy hangs in the balance as neither the Prime Minister Rishi Sunak nor Mr Hunt have confirmed it will return, meaning pensioners will be looking towards the Autumn Statement today for further clarity.

But how much could state pension payments rise if the triple lock does return?

Inflation in the year to September hit 10.1 percent, so it is likely this measure will be used for any triple lock increase. If implemented, it would take the full new state pension from £185.15 per week to £203.85 per week.

Some may get less than the full new state pension if they were contracted out before April 6, 2016.

A 10.1 percent increase would also see the full basic state pension rise from its current rate of £141.85 per week to a weekly sum of £156.20. 

Will Stevens, head of wealth planning at Killick and Co., expressed his optimism for today’s announcement.

He said: “After recent widespread speculation it now looks likely that the Prime Minister will commit to maintaining the state pension triple lock.

“For the large number of pensioners who fully rely on the state pension, and even those with additional private and workplace pensions who were looking to retire in the next few years, experiencing exceptional volatility when it comes to the value of their retirement pots, this will be welcome news.

“The last few months have upended the lives of all generations, so this commitment to keeping the triple lock in place will come as a huge relief as the cost of living continues to increase, hitting households hard.”

If the state pension does increase by inflation today, it will see pensioners’ incomes rise in real terms for the time being. However, people are generally encouraged to make their own retirement provisions, as the state pension is often too restrictive to get by on alone.

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It also remains unclear how long the triple lock will last for, as the measure is often considered expensive.

As such, experts strongly suggest people begin to look at their finances regardless of what the decision is today.

Mr Stevens added: “Everyone must consider their expenditure, particularly those who are already retired as this is what is in their immediate control.

“The overall reality is that all generations need to protect their savings from inflation and take it into account when putting together their financial plans. 

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“We are already seeing a huge impact on everyday living costs, and it is vital to also consider the long-term implications.

“However large or small your pension, it is always sensible to seek the right advice given its aim of providing you enough money to live on for the rest of your life.”

Britons could seek the help of an independent, regulated financial adviser, or alternatively gain assistance through PensionWise, a Government-backed, free service.

Speaking about the triple lock at the G20 summit in Bali, the Prime Minister said: “My track record as Chancellor shows I care very much about pensioners.

“I can’t comment on any decisions before a financial statement, but we will put fairness and compassion at the heart of all decisions we make.”

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