Chancellor Jeremy Hunt is set to deliver his Autumn Statement on Wednesday, November 22, and is under pressure to promise to honor the triple lock which will see the state pension rise by 8.5 per cent in April next.
The triple lock ensures that older Britons get a fair increase in their state pension income, and is guaranteed to rise the higher inflation, average earnings growth or 2.5 per cent.
Pay growth, including bonuses, was the highest figure this year at 8.5 per cent and should therefore be used for the increase in the state pension.
But there is speculation that Mr Hunt could reduce this to 7.8 per cent, arguing that the overall figure is skewed by NHS and civil service bonuses.
Speaking ahead of the Autumn Statement, Jason Hollands, managing director of Bestinvest, said: “The long-term sustainability of the triple lock is questionable, but it was great to have it backed before a general election. high risk for all parties.”
He continued: “What we can see is a decision to adjust the formula, at least temporarily. The case for doing this is strengthened by the distorting impact on bonus figures arising from pay arrangements once in the public sector in the NHS and in the civil service this summer a backdated pay rise.
“There is some precedent here as the earnings growth aspect of the triple lock was previously suspended in 2021 due to the disruption caused by furloughed employees returning to work.”
The new full state pension is worth £203.85 per week but a 7.8 per cent increase would increase this figure to £219.75 per week and an 8.5 per cent rise would increase weekly payments to £221.20.
Those on the basic state pension would see their payments rise from £156.20 a week, to £168.40 if a 7.8 per cent rise is confirmed and £169.50 for an 8.5 per cent rise.
Mr Hunt is also expected to use the fiscal update to cut inheritance tax and business taxes in a bid to secure Conservative voters ahead of a general election.
So what do you think? Should Mr Hunt defend the triple lock on pensions in his Autumn Statement? Vote in our poll and leave your thoughts in the comments section below.
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