State pension to rise by 10.1% but ‘controversy’ to ditch triple lock ‘has to happen’ | Personal Finance | Finance
The state pension will increase by 10.1 percent next month, but some have debated whether these rises are sustainable. From April 2023, the popular triple lock policy will make its return after a one-year suspension.
The policy was suspended for a year due to perceived lack of affordability as a result of warped earnings data during COVID-19.
The triple lock sees the state pension increase each year by whichever is the highest of: 2.5 percent, inflation or average earnings.
It means this year, the triple lock will see the state pension rise by 10.1 percent, in line with September 2022’s CPI inflation figure.
Tom Selby, head of retirement policy at AJ Bell, welcomed the return of the triple lock to help struggling retirees.
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He said: “With inflation ripping through household budgets, pensioners and those in receipt of working-age benefits will at least enjoy a bumper boost to their incomes this year.”
But what does this increase look like for pensioners?
The full new state pension is set to rise from £185.15 per week to £203.85 per week from April 2023 onwards.
For those in receipt of the full sum, this will take the amount over £10,000 per year for the first time.
This means the full basic state pension will increase to over £8,000 per year.
To claim the full amount, people usually need 30 years of National Insurance contributions.
The decision to bring back the triple lock after a year of suspension was widely welcomed by older Britons.
However, the policy continues to be expensive for the Government, leading some to believe it does not have longevity.
Mr Selby continued: “It looks like the Government will stick with the triple lock state pension promise for the rest of this Parliament.
“But it remains unclear how the main political parties will address the question of state pension increases over the longer-term ahead of the next election.
“Ditching the triple lock would undoubtedly be controversial.
“But it also has to happen at some point, otherwise the state pension will increase in real terms indefinitely.”
