State pension payments could rise to £220 a week in 2024 if triple lock is ‘in place’ | Personal Finance | Finance

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Research carried out by Quilter has found that pensioners will receive a significant payment boost in the years to come if the Government returns to its triple lock promise. The Bank of England has predicted inflation could be 7.9 percent in the third quarter of 2023 which could result in a weekly state pension of just under £220. However, Prime Minister Rishi Sunak has yet to state his commitment to the triple lock despite his predecessors promising to return it.

The triple lock is a pledge by the Government to increase state pension payments by either inflation, average earnings or 2.5 percent.

Whichever is highest will be used as the determining rate for how much pensions will go up by.

It was temporarily suspended last year due to wages being artificially inflated following the pandemic-era furloughs scheme.

To save money, the Government scrapped the triple lock link to average earnings which resulted in pensioners missing out on a higher payment than usual.

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Following this, both Boris Johnson and Liz Truss committed to returning the triple lock to full capacity.

This comes as inflation has returned to a 40-year high of 10.1 percent for September’s Consumer Price Index (CPI) inflation rate.

September’s inflation figures are taken into account as part of the triple lock and could be used to determine the rate of state pension increases.

As well as this, the Bank of England’s prediction that inflation will remain high at 7.9 percent means older people will have a similar sky-high payment rise in 2024.

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As it stands, the full new state pension is currently £185.15 a week while the basic equivalent is £141.85.

If the 10.1 percent payment hike is implemented, those on the full new state pension will receive a weekly payment of £203.85.

In comparison, anyone on the basic state pension will get £156.20 a week from next April if the triple lock returns.

With the Bank of England’s forecast, the full new state pension will be £219.95 and the basic pension £168.55 a week.

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Shaun Moore, a chartered financial planner at Quilter, outlined the potential windfall pensioners could get next year if the triple lock returns to being a permanent factor.

Mr Moore explained: “Sunak and Hunt will no doubt be weighing up whether they honour the manifesto promise of keeping the triple lock in place or opt to increase the state pension by a different measure in the face of a very difficult and uncertain economic outlook.

“While it will be expensive to keep in place for April 2023 given it is set by the September 2022 inflation figure of 10.1 percent, it may prove just too politically damaging to scrap it.

“However, looking further ahead the Bank of England has predicted inflation may drop to 7.9 percent by Q3 next year, so keeping the triple lock in place may prove less expensive from 2024.”

The financial expert outlined how the triple lock has become a “political hot potato” as politicians debate as to how much the state pension should rise by.

He added: “Pensioners across the country will be eagerly awaiting the budget with hope that the previous commitment to the triple lock will be honoured, particularly given the low increase of 3.1 percent they received in April 2022 when inflation was already around nine percent.

“The triple lock is proving to be a political hot potato for the government, and Sunak will need to make a final decision either way by the autumn statement deadline to help pensioners plan for their finances, particularly at a time when inflation continues to soar and finances are so front of mind.

“Regardless of the outcome, the triple lock does not work for everyone, and perhaps it may be time to assess whether there is a fairer way to raise the state pension while preventing more people slipping into the poverty net and having to choose between heating or eating.”

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