The triple lockdown was introduced by the coalition government in 2010 to guarantee fair progression, reduce pensioner poverty and help pensioners close the gap with the workforce
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The statutory pension is set to increase by more than seven percent next year after the Chancellor confirmed the reintroduction of the triple ban.
Under the terms of the triple-lock formula, the state pension must increase by the highest of 2.5% average earnings growth and inflation, but this year it did suspended due to distorted earnings growth during the pandemic.
Mr Sunak predicted the increase on Monday, telling MPs the triple-lock mechanism used to determine annual pension increases will be restored until at least 2024.
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The Chancellor told the Commons Treasury Committee: “The triple lock will work as it normally works.”
If inflation hits 7.4 per cent in September, it will rise to £198.85 a week. This would increase the annual payment from £9,627.80 to £10,340 a year, the largest single increase ever.
However, not every retiree gets the full benefit. Because the new statutory pension will only be paid if you retired after April 6, 2016.
This is all males born before April 6, 1951 and females born before April 6, 1953.
Anyone who retired before this date will receive the old statutory basic pension instead. If it increases by 7.4 per cent in 2023, that would mean £152.35 a week, which translates to £7,922 a year.
That’s £2,418 less a year than newer pensioners.
From Monday, April 11th, the full new statutory pension will raise £185.15 per week, up just 3.1 percent, due to the triple lockdown downgrade. The old basic state pension pays a maximum of just £141.85 per week or £7,376.20 per year.
MP Harriett Baldwin asked the Chancellor: “Are you guaranteeing pensioners the triple ban again this year?”
Mr Sunak replied: “Yes.” When asked what the Treasury Department had budgeted for the pension increase, he added: “It will be whatever the estimated consumer price index is in September – about seven percent.”
Treasury official Dan York-Smith, who appeared alongside the Chancellor, pointed out that the official forecast for September CPI inflation is 7.4 percent.
Mr Sunak also defended his recent spring statement following widespread criticism that it failed to address the worrying cost of living crisis.
He said “irresponsible” borrowing risks fueling inflation and putting pressure on living standards.
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He said: “We are already forecast to borrow about 60 percent in the coming year, more than a percentage of GDP than our post-war average, 20 percent more than a percentage of GDP than we forecast in October, it is about so already a significant amount of borrowing.
“In my view, excessive borrowing is now irresponsible.”
Mr Sunak said: “If anyone thinks that the government can or should fix everyone for inflation – particularly inflation at this level caused by global supply factors – then that’s something I don’t think is feasible.”
He said “irresponsible” borrowing risks fueling inflation and putting pressure on living standards. Mr Sunak said his plan to lower the principle of personal income tax from 2024 would bring “discipline” to the debate over levels of public spending.
He added: “Aiming for something now means that at that point we can hopefully have a more disciplined conversation about incremental public spending, which is already at very high levels. My priority at this point is to continue cutting taxes, not increasing public spending.”
His comments followed a fresh warning from Bank of England Governor Andrew Bailey. He said: “This is truly an historic shock to real incomes. The energy price shock this year will be bigger than any single year in the 1970s.”
https://www.mirror.co.uk/money/state-pension-hit-10465-next-26580448 The state pension is set to reach £10,340 next year - but some pensioners will get £2,400 less