Triple lock on state pension scrapped – here's how much you will lose...

[dutchman]

Pensioners have had the greatest loss of spending power in more than 42 years



Pensioners have experienced a £551 real cut cut to their income over the past 12 months, with the cost of living rising three times as fast as the state pension.

More than 12 million pensioners will be left thousands of pounds worse off throughout their retirement after the Government broke its promise and suspended the "triple lock" at the same time as the inflation surged to a 40-year high.

Ministers denied pensioners what would have been a record £822 increase in the state pension last month by suspending the triple lock, which ensures that pensions increase by the highest of inflation, wage growth or 2.5pc.

The state pension increased by £5.55 a week in April, a rise of 3.1pc based on inflation in September 2021, rather than wage growth, which was 8.1pc.

The increase has fallen far short of inflation, which has hit 9pc according to new figures from the Office for National Statistics. Someone turning 66 this year would be £13,209 out of pocket by age 85 as a result of the lower increases.

It represents the greatest loss of spending power for pensioners in more than 42 years.

The Government has promised to reinstate the triple lock next year, which could deliver a boost if inflation remains high in September 2022.

In the meantime, pensioners will be forced to get by as their spending power falls by hundreds of pounds during the worst cost of living crisis in a generation. The state pension makes the biggest contribution to most people's retirement incomes.

In reality, a typical pensioner will need to withdraw £2,400 more this year to supplement their income and cover rising energy bills, food, fuel and household expenses, according to figures from consultancy LCP. Energy bills alone have increased by £693 on average this year. A typical energy bill of £2,000 takes up 20pc of new state pension income.

Rebecca O’Connor of Interactive Investor, the stockbroker, said: “Energy price rises are panic inducing. It is asking the impossible to expect people on low, fixed incomes, including the UK’s more than 11 million pensioners, to shoulder such increases.”

[dutchman]

The Government has promised to reinstate the triple lock next year, which could deliver a boost if inflation remains high in September 2022.

Reinstating the triple lock WON'T restore the money that has already been cut and will still be cut from future payments!

Also you can bet that September's inflation figure will be artificially low so as to minimise any future pension rise.

[rebbonk]

[dutchman]

Triple lock state pension betrayal must not happen again, warns Ros Altmann



A row over whether older people should get a bumper state pension increase when workers are handed below inflation pay deals has broken out among top politicians.

Former Pensions Minister and campaigner Ros Altman says pensioners deserve their rise after the Government betrayed its 'triple lock' promise and gave them a 3.1 per cent increase this year.

It is really sad to see comments suggesting that pensioners should not get full inflation protection next year, just because public sector workers may get lower rises.

This ignores the reality that most workers have incomes way above the £9,600 a year that poorer pensioners live on, and that public sector pensions will rise fully with inflation.

Pensioners were betrayed this year when the triple lock on state pension increases was suspended. It must not happen again. State pension inflation protection must be properly restored after that broken promise.

The state pension increase was only 3.1 per cent this year, despite earnings and price rises rocketing.

The UK state pension is the lowest in the developed world, and millions of pensioners spend most of it on essentials like food and energy that have soared in price.

Those who complain that public sector pay is not rising by as much as CPI are ignoring the value of public sector pensions, which are not mentioned in discussions of pay rises.

Their value has soared since 2010 as ultra-low interest rates have increased their value from around 25-30 per cent of each workers' salary, to well over 40 per cent of salary now.

These payments can never be reduced and must rise in line with inflation, so how could it be right to suggest that state pensions should not be increased at least as much?

The annual public sector pensions bill has consistently outstripped forecasts, despite efforts to reduce the disparity in generosity between public and private sector pensions.

Public sector workers do not tend to consider the full value of their promised pensions, but this is a real part of the cost to taxpayers.

Millions rely solely on the state pension and the poorest, typically women and those who were in low-paid careers, often had no chance to build private pensions.

[dutchman]

Record inflation wipes £14,000 off the state pension



Pensioners' incomes have fallen by £589 over the past year in real terms with prices increasing three times faster than the state pension.

British retirees will now be more than £14,000 worse by age 85 after the Government suspended the “triple lock”. The state pension increased by just 3.1pc in April, equivalent to £5.55 a week, while prices have surged 9.4pc in the 12 months to June.

Pensioners would have needed an increase of at least £16.88 a week, amounting to £878 a year, to keep up with the rising cost of living.

Someone turning 66 this year would be £14,105 out of pocket by age 85 as a result of the lower increase, even by the most conservative estimates.

Steven Cameron of Aegon, a pensions group, said: “Many pensioners will be struggling and a year is a very long time to have to wait for the state pension to catch up. Sadly many may not live to see that.”

Helen Morrissey, of stockbroker Hargreaves Lansdown, warned some pensioners would be forced to return to work to make ends meet.

She said: “Even those with other pension income will find finances squeezed. We could see some decide to return to the workforce to make up the shortfall but not everyone will be able to do this.”

Last year, ministers denied millions of pensioners a record £822 increase in the state pension after its controversial decision to suspend the triple lock. The state pension increased by 3.1pc based on inflation in September 2021, rather than wage growth, which was 8.1pc.

The Government promised to reinstate the triple lock next year, which could deliver a record boost next April, assuming inflation remains at such high levels come September.

However, there are no guarantees the promise will not be broken again. A change in Tory leadership could open the doors to a second suspension.

Pensioners will have to grapple with huge losses in spending power until next April, with little protection from the worst cost of living crisis in a generation. Household energy bills alone are on track to rise by £1,722 in total this year. Energy bills increased by £693 in April but are expected to jump even higher in October.

[dutchman]

Sunak knew this would happen when he suspended the triple-lock. He stabbed pensioners in the back the same way he stabbed Boris Johnson in the back.

I don't 'Truss Liz' much on this issue either!

[rebbonk]

Pensions have been an easy target for years. People need to open their eyes and start asking questions. Why can the French retire so much earlier than we can? Why are German pensions so much higher than ours? Both answers lie in the fact that the great unwashed of this country have been Royally shafted by politicians!

Unfortunately, most voters shouldn't be allowed to vote as they have little idea of how things actually work, never mind what is in their best interests!

I was given very good advice years ago from 2 very different people. Both said exactly the same thing, "Don't trust politicians to look after your pension, stay out of AVCs, and sort your own pension out where it can't be touched by others!" - I followed their advice and I don't regret it.

[dutchman]

Pensioners to be £800 worse off next year even after £1,000 pay rise



Retirees will have their income cut by more than £800 next April in real terms, even if the state pension rises by £1,000.

Pensioners are on track to receive a record state pension increase under the triple lock next year after inflation hit 10.1pc last month.

However, price rises are now expected to almost double to 18.6pc by next year, according to analysis published by banking firm Citigroup this week.

It means more than 12 million pensioners are in for a real terms income cut as the state pension rise will fall far short of inflation for the second year in a row. Each year the state pension rises under the “triple lock” by the highest of wage growth, the previous September’s inflation or 2.5pc.

Price rises are widely expected to remain at the double digit mark in the coming months before shooting higher by next April as energy bills skyrocket. The average household energy bill is expected to hit £3,717 a-year in October, before rising to £4,567 in January 2023 and £5,816 in April, according to Citigroup.

If inflation remains at the current 10.1pc level in September, the new state pension will rise by nearly £1,000 next year. However, over-66s would need a boost of £1,827 to be able to maintain the same standard of living.

The new state pension is on track to increase by £18.70 a week, from £185.15 to £203.85. The basic state pension, which is paid to those who reached state pension age before 2016, would increase from £141.85 to £156.20.

This will deliver a second blow to British pensioners, who have seen their incomes fall by £673.95 in real terms this year. Inflation has risen more than three times faster than the state pension in 2022.

The triple lock was suspended this April and pensions only rose by 3.1pc last month after the Government ignored abnormal 8.1pc wage growth figures that were impacted by furlough. The controversial decision left over-66s £15,700 poorer over an average retirement.

Steven Cameron, of pensions group Aegon, said pensioners would now have to wait an extra year for their inflation-beating increase to come.

“This is an ongoing problem with the state pension because by the time it increases in April, the inflation figure used is seven months out of date. There is a constant time lag,” he said.

This means that in times of rising inflation, pensioners will miss out on the full increase.

[dutchman]

Triple lock is confirmed: State pension will rise 10.1% after inflation jumps



The state pension will rise by 10.1 per cent from next April after the Government confirmed it will stick by the triple lock promise.

The full state pension for those retiring after April 2016 should now rise to £203.85 per week or £10,600 per year - taking it above the £10,000 benchmark for the first time.

The old basic state pension should rise to £156.20 per week or £8,122.40 per year.

Thanks to the announcement, pensioners dodged a 'double whammy' of broken promises that could have cost them £442 a year.

Yesterday, reports suggested the Chancellor Jeremy Hunt might be preparing to axe the triple lock.

However, during PMQs earlier today, Liz Truss said that she and the Chancellor are completely committed to the triple lock meaning that pensions should now keep up with rising living costs.

Steve Webb, This is Money's pensions columnist and a partner at LCP said: 'When the triple lock promise was broken in 2022, the Government insisted that this was a one-off measure because of the special circumstances of the pandemic.

'It would be a high risk political gamble to break this manifesto commitment for a second year.'

He added: 'Many pensioners have faced a big squeeze on their standard of living this year following a very low pension increase in April 2022 and would have expected the April 2023 increase to help to catch up on the big rises in the cost of energy and food.

'Breaking the triple lock could cost a single pensioner £442 per year.'

[rebbonk]

The state pension will rise by 10.1 per cent from next April after the Government confirmed it will stick by the triple lock promise.

After recent weeks, just how much can we trust/believe this? Truss hardly has a good record of delivering on her promises!