The Government could loosen the ‘triple lock’ on state pension increases, a minister has suggested.
Prime Minister Liz Truss previously pledged to stand behind the lock, a mechanism that ensures the state pension rises by the highest rate of inflation, earnings growth or 2.5% each year.
But when Finance Minister Chris Philp was asked whether the state pension would rise in line with inflation next year, which is expected to be at least 10%, he said the matter was “under consideration”.
Speaking to ITV’s Robert Peston last night, he said: “I’m not going to make any political commitments on live TV, it will be dealt with in the normal way, we will make a decision and it will be announced, I’m sure, in the first instance in the House of Commons. “
The government suspended the 2019 manifesto commitment in a move that left pensioners with a 3.1% pay rise while inflation soared to over 9%.
Commenting on reports that ministers will be asked to produce efficiency savings for their departments, Mr Philp said the government was “looking for efficiency wherever we can find it”.
The State Pension is increased every April using the previous September’s inflation figures. With the triple lock in place, pensioners can expect a record rise in April 2023 worth around £1,000 a year.
Maintaining the deadlock will cost taxpayers an extra £21bn by the next general election, according to calculations by stockbroker Interactive Investor.
Helen Morrissey, of estate agent Hargreaves Lansdown, said Mr Philp’s comments would cause “real concern” among pensioners who had been counting on the increase.
“Many pensioners were left struggling with their finances as the cost of energy and food rose and their incomes failed to keep up,” she said.
The State Pension was expected to break the £200-a-week mark for the first time next April, with pensioners set to receive a record boost as a result of rapid inflation. Consumer prices rose 9.9% in the year to August and are expected to be in double digits in the year to September, the month used in the calculation.