Jonathan Ashworth calls for return of pension triple lock
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The triple lock is set to return in 2022 which means the state pension will increase by either the rate of inflation, average earnings or 2.5 percent, whichever is higher. However, with inflation predicted to hit 11 percent by the end of the year, any increase looks likely to be eaten up.
News that inflation hit 9.4 percent earlier today won’t come as a surprise to many as experts predict it will soar even more to a staggering 11 percent by the end of the year.
While rising inflation means things like food, fuel and mortgage payments cost a lot more, retirees will be hoping their state pension rises in line with inflation in 2022.
The triple lock was temporarily suspended this year due to the COVID-19 pandemic, however the Government has promised it will be reinstated.
It should help pensioners who are struggling to survive the cost of living crisis, as long as it isn’t all eaten up by inflation.
Steven Cameron, Pensions Director at Aegon, said: “While we are seeing a reprieve from record temperatures, the rate of inflation just keeps hotting up.
“At 9.4 percent up from 9.1 percent last month, it’s at a 40 year high and increasingly likely to reach double figures in the months ahead.
“Offering relief from the cost of living crisis will no doubt be front and centre of Government priorities including during the competition to be next Prime Minister.
“And all eyes will be on September’s figure published in October which will determine the increase in the state pension triple lock next April.
“10 percent would be the biggest ever rise in the state pension under the triple lock.”
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He added: “Double digit increase is likely as the Bank of England’s latest forecast suggests CPI could peak at 11 percent in Q4 2022.
“While a 10 percent increase in state pensions might look attractive to those receiving it, the unfortunate news is it may be eaten up with rising prices.”
Pensioners have been taking to Express.co.uk to complain about rising prices and calling on the Government to do more.
One reader @paddyg leads said: “Using percentage rate rises does not reflect the true position of the rises as last year I was paying 99p for two litres of milk and now it is £1.45.
“My dual fuel payment was £66 per month now it is £208, cheese that I buy was £1.47 for 400g now its £2.25.
The reader continued: “The Government needs to act as more and more people like me have limited means.
“Being on a pension means we cannot do a bit of extra overtime to limit the damage.
“We are being dragged into fuel poverty and a food crisis where even the out of date aisles see fights and arguments to get the cheaper food, which for many is still too expensive.”
However, another reader @the Old Oak Tree said: “Not much news regarding pensioners, but take heart the triple lock is on its way, after all it was promised this year, should be worth a grand or so.”
Meanwhile, Laura Suter, head of personal finance at AJ Bell, said it could also be the signal for the Bank of England to hike rates by 0.5 percent next month.
She said: “It’s the same story as previous months: petrol, home energy bills, food prices and mortgage costs are all pushing up the inflation rate as they keep on heading upwards.
“This highlights the Bank’s conundrum, as one of the biggest contributors to inflation at the moment is mortgage costs, which are a direct result of the rate setters increasing Base Rate significantly since December.
“Everyone will have felt inflation in their food shop, with this month’s figures laying bare just how pricey everything has become.”
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