State pensioners hit back as triple lock freeze looms closer and inflation soars | Personal Finance | Finance
State pension payments may have increased by eight percent this year under the triple lock mechanism. However, this was temporarily ditched due to fears any rise would be unaffordable and unfair on younger individuals. The triple lock was first introduced back in 2010, to guarantee the sum would not lose value in real terms.
The mechanism means the sum usually increases each year by whichever is the highest: 2.5 percent, earnings or the rate of inflation.
But with the measure paused for this year, and a double lock taking effect instead, the Government has implemented a 3.1 percent increase, linked to the inflation figure that’s used.
Express.co.uk readers have recently demonstrated their fury at the idea the state pension will not rise as previously expected.
AgedParent said: “Suspended for one year – until next year when it will be suspended again.
READ MORE: Pensioners face ‘toughest struggle’ as inflation soars to 5.4%
With this rate not appearing to slow any time soon, pensioners will have to make their money go further.
Becky O’Connor, Head of Pensions and Savings at interactive investor, highlighted Age UK statistics which estimate there are more than two million pensioners currently living in poverty.
She said: “Those receiving the state pension will receive a 3.1 percent uplift in April, which is dwarfed by the current level of inflation.
“The imbalance between state pension rises and inflation rates, which are likely to rise further by April, will provoke further calls for the Government to consider a more generous uprating that properly reflects the difficulty many older people now face.
“We saw from other ONS figures published this week that the number of older people in work has fallen significantly during the pandemic. Finding work is no easy task when you are in your 60s – this group survive on their pension alone, which is precarious at times of rising inflation.
“Inflation also further erodes the value of cash savings, which come with very low interest rates and which again, are often favoured by older generations who are withdrawing from their pensions.
“The value of wealth built up over a lifetime’s work is being eroded every day it is held in cash, leaving some at risk of running out of their private pension money sooner into their retirements. We are several interest rate rises away from this dynamic changing.”
Older people who are struggling may be entitled to additional support to help with their day-to-day costs.
Britons are encouraged to check their eligibility for Pension Credit as well as other discounts which could provide assistance.
