State pension triple lock: Inflation could double state pension increase | Personal Finance | Finance

The one-year suspension of the state pension triple lock was the source of much controversy when it was announced, but the potential effects are only now becoming clear. As inflation continues to surge, pensioners are at risk of losing money in real terms this April.

That is after the Bank of England warned average prices could rise by as much as 7.25 percent in April 2022.

In comparison, the state pension will only rise by 3.1 percent, less than half of the potential rate of inflation.

If the state pension triple lock had been kept in place as normal, pensioners could have received an increase to their weekly state income of more than eight percent.

This could have allowed them to still beat the unprecedented rate of inflation which may be coming, but instead they face being left worse-off.

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A stunning 40 percent of pensioner households are now expected to be in fuel poverty as a result of the hike, according to figures from the Resolution Foundation.

She added: “Those living on the state pension will find the bill increase hardest to stomach, as they will see a below-inflation increase to their pension in April, at the same time as facing a far larger hike in their fuel costs.”

The state pension triple lock is a Government guarantee which has traditionally ensured the income of pensioners is able to keep pace with the rising cost of living.

Under the terms of the triple lock policy, the state pension increases each year by the highest of three figures.

Average earnings growth was to be the figure used to increase the state pension for the 2022/23 tax year, coming in unusually high at more than eight percent.

However, the Government decided that this high rate of earnings growth was an anomaly due to the millions of Britons who returned to work from the furlough scheme.

The earnings link was therefore temporarily removed from the triple lock calculation for the upcoming tax year.

This meant the next-highest figure, inflation, was used instead.

However, since the triple lock boost of 3.1 percent was locked in back in October 2021, inflation has continued to rise, potentially placing pensioners in a financially precarious position.