State pension triple lock 'should never have been broken!' Retirees in living cost squeeze

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State pension triple lock 'should never have been broken!' Retirees in living cost squeeze

The suspension of the triple lock policy has reduced the level of income boost pensioners will receive this year. With inflation continuing to rise

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The suspension of the triple lock policy has reduced the level of income boost pensioners will receive this year. With inflation continuing to rise, the repercussions for retirees could be significant.

Karl Tippins, financial expert at Pension Times, gave his thoughts on the position pensioners find themselves in as the upcoming state pension increase is currently lagging behind the rate of inflation.

He said: “Inflation is hitting a 30 year high of 5.4 percent and pensions have only increased by a further 3.1 percent in April.

“This could be detrimental to the vulnerable people in our society.

“Many pensioners rely solely on their pension with no personal savings, so how can we expect them to live a happy comfortable life if they don’t have enough money to cover basic costs.”

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The triple lock policy usually guarantees that the state pension increases every year by the highest of three metrics: the rate of inflation, the rate of average earnings growth, and 2.5 percent.

Under these rules, pensioners were on track to receive a bumper increase of more than eight percent to their weekly state pension income, in line with average earnings growth.

However, the Government decided to make a temporary change to the triple lock policy for the 2022/23 tax year and remove the earnings link, denying pensioners a record state pension boost.

The rationale for this decision was that the Government believed earnings growth was being artificially inflated by people returning to work from the furlough scheme, and that such a large increase to the state pension would not be fair to taxpayers.

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Karl Tippins, financial expert at Pension Times, gave his thoughts on the position pensioners find themselves in as the upcoming state pension increase is currently lagging behind the rate of inflation.

He said: “Inflation is hitting a 30 year high of 5.4 percent and pensions have only increased by a further 3.1 percent in April.

“This could be detrimental to the vulnerable people in our society.

“Many pensioners rely solely on their pension with no personal savings, so how can we expect them to live a happy comfortable life if they don’t have enough money to cover basic costs.”

As a result, this year’s state pension increase will now be considerably lower than pensioners first hoped.

Inflation has risen consistently in recent months, as the UK economy recovers from the financial impact of the COVID-19 pandemic.

The consumer price index (CPI), which is used as a measure of inflation, rose from a relatively modest two percent in July 2021 up to 3.2 percent in August, before dropping back down slightly to 3.1 percent for the year to September 2021.

This was the only drop in inflation seen in the last five monthly periods, which is unfortunate for pensioners, as it is the September figure which was used to dictate the increase to their state pension.

The combination of sky-high inflation and a lower-than-expected state pension increase threatens to leave pensioners in a position where their income is not rising fast enough to keep up with the cost of living.

Mr Tippins believes suspending the triple lock was not the right decision.

He said: “The triple lock promise should never have been broken by ministers.

“We should be looking after our elderly with great care not under funding them.”



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