12m face cash cut as Liz Truss could abandon state pension triple lock
MILLIONS of pensioners could lose out on promised cash as Liz Truss today refused to commit to the pension triple lock.
A spokesperson for the PM confirmed the popular policy is under threat, despite it being a Tory manifesto commitment in the 2019 general election.
It would affect around 12 million OAPs with some retirees at risk of being £12,000 worse off.
They said: "We are very aware of how many vulnerable pensioners there are and indeed our priority... is we continue to protect the most vulnerable in society.
"The Prime Minister and the Chancellor are not making any commitments on individual policy areas at this point.
"But as I say the decisions will be made through the prism of what matters most to the most vulnerable."
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The triple lock is a calculation used to determine how much the state pension rises by each year.
It was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- Earnings – the average percentage growth in wages in Great Britain
- Prices – the rising cost of living in the UK, as measured by the Consumer Prices Index (CPI)
Figures from the Office for National Statistics showed that the number of Brits old enough for a state pension will go up by 31 per cent, from 12.3m in 2012 to 16.1m by mid-2037.
In 2021, it was estimated that the average pensioner would lose £12k under the proposal.
Tom Selby, head of retirement policy at financiers AJ Bell, gave an insight into how much pensioners could lose as inflation soars.
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Speaking to magazine, he said if inflation comes in at 10 per cent on Wednesday, the loss of income versus an inflation-linked increase would be over £430-a-year.
The loss applies to those on a maximum new state pension.
While those on the full basic state pension could see their income "rise by over £330 less”, he warned.
Meanwhile Chris Noon, a partner at pensions firm Hymans Robertson told : “Too many pensioners continue to live on incomes below the pensioner poverty."
He added that with such low state pensions, changing the triple lock now will store up problems for future governments who will have to make radical changes to deal with increased pensioner poverty.
Yesterday the PM backed down on a smorgasbord of money policy promises, in a major effort to save her career and calm jittery markets.
New Chancellor Jeremy Hunt declared the mini budget dead in the water, as he announced a planned 1p cut to the basic rate of tax would be binned.
Mr Hunt also confirmed that the Energy Price Guarantee - which sees the typical bill capped at £2,500 - will only last until April, instead of October next year.
The u-turns are part of a major government effort to prove to the City that No10 is fiscally responsible, following the disastrous mini budget.
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The 45bn tax bonfire sent the pound plummeting and interest rates soaring.
But as part of No10's effort to clean up the mess it made, the pension triple lock has been thrown under the bus.
