Today’s inflation figures show that the new state pension would rise from £185.15 per week to £203.85 if the Government were to retain the triple lock policy and increase pensions by the rate of CPI inflation, announced today at 10.1% in the year to September.  This would be the first time the main state pension rate had exceeded £10,000 per year.

The old basic state pension (for those who reached pension age before 6th April 2016) would rise from £141.85 to £156.20.

But the new Chancellor, Jeremy Hunt, has so far not confirmed that the triple lock will be kept.  The legal minimum increase in the state pension (without separate legislation) would be to increase it only in line with average earnings.  The latest figures for average earnings (which compare May/Jun/Jul 2022 with the same three months a year earlier) show a 5.5% for earnings growth (including bonuses).

If pensions rose by just 5.5%, the weekly new state pension would be around £8.50 per week lower, and the annual loss would be £442 as shown in the Table:

There could be a double blow for pensioners as the Chancellor has also announced that universal help with energy bills will end in April 2023, suggesting that pensioners not on benefit could see their real income squeezed just as their outgoings soar.  This comes on top of a very low state pension increase of just 3.1% in April 2022 when inflation was already 9%, indicating the extent of the squeeze which pensioners have already faced this year.

Commenting, Steve Webb 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.  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.  A reduced pension rise, combined with a cut in help on energy bills, could be part of a ‘double whammy’ for millions of pensioners”.

** ENDS **

Note to editors:

1. According to the House of Commons library (briefing note p8: State Pension triple lock (parliament.uk) average earnings for these purposes is measured including bonuses and using the figure for May/Jun/Jul 2022 compared with the same period a year earlier;  ONS says this was 5.5%.  See: Average weekly earnings in Great Britain - Office for National Statistics (ons.gov.uk) – note that this is not the most recent release, but gives figures for the May/Jun/Jul 2022 period which is the relevant period for these purposes.