The government pension bill is set to rise by more than £13.5billion by 2023, costing taxpayers an additional £24billion over the next two years as substantial increases are expected. Liz TrussShe, who was officially sworn in as Britain’s new Prime Minister by the Queen today, has previously said she would support the mechanism. state pension The triple lock ensures that the annual increase in payments is in line with income growth, price inflation or a maximum of 2.5% per year.
The state pension is set to cross the £200-a-week mark for the first time in April 2023, with millions of UK pensioners set to receive a record cash injection due to the current spike in inflation.
Pensioners will be largely shielded from a severe cost-of-living crisis in the coming months, as their state pension will provide them with income growth in line with inflation.
Britain found itself in record inflation territory, with prices hitting 10.1% in July, and forecasts by several experts remained in double digits in September – the month used in the calculations.
Carl Emerson of the Institute for Fiscal Studies research group cautioned: “Triple locks are expensive in the long run and therefore have to be abandoned at some point.
“The CPI indexation of state pensions in April 2023 and April 2024 – which will be a huge cash boost – is solid.
“It is simply a question of whether the increase in public pensions as a share of income should be permanently blocked.
“This is clearly not sustainable, especially in the current economic downturn.”
Andrew Tully of pension group Canada Life has warned that “maintaining the triple lock is financially difficult” and that the government will have to question its use of public finances.
He added: “The Office for Budget Responsibility (OBR) has previously said the cost per percentage point of the state pension was around £900million.
“So next year alone an 11 per cent increase will cost the government around £10billion.
“It should be remembered that the public pensions of today’s retirees are paid from the tax revenues of today’s workers.
‘The government will adopt a delicate fiscal balancing act to ensure the state pension continues to be funded while the promise of tax cuts is hyped.’
Jon Greer, head of pension policy at wealth manager Quilter, said: “Given soaring inflation and its desire to stay true to the Conservative Party manifesto of maintaining the triple lock for years to come, Terra Sri Lanka will struggle to balance the books. Do not add other taxes and reduce existing ones.
“It will end up calling into question how future welfare reforms will also be funded.
“We may have to give up something. Retirees across the country are hoping it doesn’t start with triple locks.