Uk News State pension to increase 10% in 2023 as triple lock guarantee is reinstated by Government United Kingdom news
PremierLeague-News.Com - Experts say the increase to state pension payments is both affordable and overdue
PremierLeague-News.Com - Breaking Sport Transfer News ! State pensioners will receive an extra 10 per cent in payments next year to stay in line with inflation, even as the government rejects calls to do the same for public sector worker pay. The Treasury plans to return to the “triple lock” system, by which the state pension is increased annually in line with inflation, average earnings or a flat rate of 2.5 per cent, whichever is highest. The next rise, which will take place in April 2023, will be based on the reading of the consumer price index (CPI) this coming September, when it is expected to reach 10 per cent. The CPI for May reached 9.1 per cent – its highest figure since 1982 – as the cost of living crisis continues to bite for UK families. September’s increase would result in an additional annual payment of around £960 for pensioners, representing a total cost of £10bn for the taxpayer. The state pension was raised by 3.1 per cent this April, when inflation was running at 7.8 per cent, as the rate had been set the previous September.Downing Street defended the decision despite public sector workers calling for similar raises to their salaries. Ministers have previously said that matching wages to inflation would bake higher prices into the economy, making it even harder to curb the impacts of inflation. Asked why state pensions would rise with inflation but not public sector pay, the prime minister’s official spokesman said those who received a state pension were disproportionately affected by high energy costs. “They can’t always increase their incomes through work and they are more vulnerable to cost of living pressures,” he said.The spokesman said that the government had taken “difficult decisions” when it suspended the triple lock last year, which he said was largely due to the need to avoid an anomaly where pensions would have been unduly rewarded for the rise in average wages brought about by the end of the furlough scheme. “The chancellor emphasised that the government had responsibility to not take any action that would feed into inflationary pressures, or reduce the government’s ability to lower taxes in the future,” the spokesman said.Steve Webb, partner at consultants LCP and former pensions minister, said the increase was both affordable and overdue.
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. “This year, pensioners received just a 3.1 per cent pension increase when inflation was running at around 9 per cent. Next April’s increase is very much a ‘catch-up’ and many pensioners will still be struggling between now and then. “We also need to remember the revenue side of the government’s accounts. With tax thresholds frozen, high inflation will turbo-charge government revenues, which means that high headline rates of increase in pensions and benefits will be more affordable than normal. “Having broken its triple-lock promise once already, it would be wholly unacceptable for the Government to do so for a second year running.”Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said the suspension of the triple lock has been a point of “outrage” and welcomed its reinstatement. “Pensioners tend to spend a larger proportion of their income on essentials such as energy, fuel and food and so have been especially vulnerable to soaring inflation in recent months,” she said. “With inflation expected to hit somewhere around 10 per cent in the coming months it is likely pensioners will see a large increase in state pension for next year though that will feel like a very long time to wait for those struggling to meet their costs right now. This will of course push up the already sizeable cost of providing the state pension as well as other benefits and this could mean government is less able to bring in further measures if the cost of living crisis deepens over the coming year. However, it will come as a huge relief to those pensioners dependent on state pension who are struggling to make ends meet.”Becky O’Connor, head of pensions and savings at interactive investor, said that anybody relying on the state pension was already “scraping the bottom of the barrel” to survive the cost of living crisis. “Next year, they are likely to see a rise in line with inflation, but that won’t help them until April 2023 and won’t make up for the deficit they continue to face this year as they struggle to heat their homes and put food on the table.“High inflation of basic goods affects low-income households, such as those reliant on the state pension, more than higher-income households. Increasing the state pension in line with price rises is an absolute must to prevent poverty among those who have stopped working.”
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