The Department for Work and Pensions (DWP) will announce the State Pension and benefits uprating next month following a scheduled annual review which takes place after the release of the September Consumer Price Index (CPI) inflation figures in October.
The Secretary of State is required by law to review certain benefit rates annually to ensure they retain their value and the Work and Pensions Committee has already pressed Chancellor Kwasi Kwarteng to honour the commitment made by the former Chancellor, Rishi Sunak, to uprate benefits in April 2023 in line with the September 2022 CPI rate.
When questioned in Parliament, the Chancellor stated that the UK Government “will make announcements about that in due course,” sparking doubts about the likelihood of uprating. And one MP has now asked DWP about any assessments it has made into the real-term value of the State Pension following the increase in the cost of living.
In a written response to Hywel Williams, Pensions Minister, Alex Burghart, defended the UK Government’s actions and highlighted measures taken to “protect pensioners” during the cost of living crisis.
He also explained that in cash terms, since 2010, the full annual amount of the basic State Pension has risen by over £2,300 and indicated that the Triple Lock rule will be implemented in the “usual way for the remainder of the Parliament”.
The Triple Lock rule
This is the UK Government’s guarantee that State Pensions grow in line with whichever is highest out of earnings, inflation or 2.5%.
It was introduced to help give pensioners a decent minimum level of income which would keep pace with growth in workers' earnings.
Mr Burghart responded: “The [UK] Government has acted to protect pensioners against the current cost of living situation with a range of support. The value of the State Pension should not be considered in isolation.
“Since 2010, the full yearly amount of the basic State Pension has risen by over £2,300, in cash terms. That's £720 more than if it had been uprated by prices, and £570 more than if it had been uprated by earnings.
“The Government has committed to implementing the Triple Lock in the usual way for the remainder of the Parliament.”
In the letter to Chancellor Kwasi Kwarteng, the Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Prices are continuing to rise at unprecedented rates and inflation is unlikely to abate soon.
“People on the lowest incomes are increasingly struggling to get by on the essentials and, because of the jump in inflation between September 2021 and April 2022, benefits claimants’ incomes have fallen sharply in real terms this year. The former Chancellor assured Parliament there would be a ‘catch up’ next April.”
He warned: “The Chancellor must honour his predecessor’s pledge to uprate benefits in the usual manner, in line with inflation. Without it, countless families risk being pushed further into crushing poverty as they are forced to stretch the same money over higher prices.”
The annual uprating on State Pension and benefits will be applied from April 10, 2023.
The next General Election must be called by January 2025.
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