The amount of State Pension you get increases in April each year, and the triple lock means the rise will either match the rate of inflation, average earnings or 2.5 per cent
State pensioners on the Basic rate could be in line for an additional £352 from the Department for Work and Pensions courtesy of the Triple Lock. Your State Pension amount goes up each April without fail.
The triple lock ensures the increase will match either the inflation rate, average earnings or 2.5 per cent – whichever proves highest. Currently, inflation is forecast to hit four per cent.
This means Basic state pensioners who presently collect £169.50 weekly will pocket just under £7 extra per week – totalling £352 annually from the Labour Party government and DWP come April, assuming the numbers stay put. In other similar news, there was a state pension warning for millions of Brits between two specific ages.
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Sir Steve Webb, the former pensions minister who now works as a partner at consultancy Lane Clark and Peacock, reckoned the triple lock pledge creates spending headaches the chancellor could well do without, reports Birmingham Live.
He explained: “This commitment was not only in the Labour manifesto but has also been used repeatedly to defend the changes to winter fuel payments, so seems unlikely to be broken.”
“The challenge for all parties is how to move from the current process to something less generous, not least at a time when the state pension is still not especially generous by international standards.”
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Independent pensions consultant Tom McPhail warned: “While the timing is inevitably slightly uncertain, the combination of frozen tax thresholds and rising inflation inevitably leads to the state pension becoming liable to income tax.”
“It is ridiculous that the government has launched a pension commission to review our retirement prospects, yet before the commission even starts, they have put out of reach all the big policy levers which could actually make a difference, including reforming the triple lock.”
The International Monetary Fund (IMF) has issued a warning that the UK government should consider scrapping the triple lock and index the State Pension to the cost of living as part of “tough fiscal choices” it faces.
The IMF acknowledged that while economic and public service reforms are moving “in the right direction”, Chancellor Rachel Reeves needs to look at “further spending prioritisation” to rebuild fiscal buffers.
One thing is sure amid the ongoing discussions surrounding the Triple Lock: pension policy will have an important impact in future political as well as economical decisions.