MPs have suggested changes to how the state pension is uprated each year, amid ongoing fears about the sustainability of the triple lock.
During a benefits uprating debate in the House of Commons yesterday, Nigel Mills MP questioned why the September inflation figure is used for an April uprating and whether a rolling two-year or three-year average could help secure the future of the triple lock.
The state pension increased by a record 10.1 per cent last April, and its set to rise by 8.5 per cent this year.
The triple lock has now raised state pension spending by around £11billion a year, compared with what spending would be if the pension had risen in line with either prices or earnings since 2010, according to Institute for Fiscal Studies (IFS) analysis.
Maintaining the triple lock could increase spending by anywhere between a further £5billion and £45billion per year (in today’s terms) by 2050.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, today called for an “urgent review” of the state pension and the triple lock.
She said: “The triple lock has had a rollercoaster ride, delivering two of its highest increases ever in the past two years, after being controversially suspended during the pandemic.
“After a period of time when people’s finances have been torn to shreds by the cost-of-living crisis, the MPs were in no mood to oppose the 8.5 per cent increase due to come into effect in April, but there was a sense that change is needed in how benefits are uprated.”
Ms Morrissey said the UK has “reached an important point” in the debate.
She said: “The triple lock has boosted state pensions, but the fact remains many pensioners remain in poverty while state pension costs spiral.
“A review of state pensions, and the triple lock’s role within it, is urgently needed to deliver a system that delivers certainty for pensioners now and in the future.”
The full basic state pension will increase from £156.20 to £169.50 per week, taking it to £8,814 a year.
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The full new state pension will increase from £203.85 to £221.20 a week from April
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The full new state pension will increase from £203.85 to £221.20 a week.
This equates to £11,502.40 over the course of the year.
It's possible to check state pension entitlement online using the state pension forecast.
The tool also shows when a person can get the state pension, and how to increase it, if they can.