The current cost of living crisis will result in a significant increase to people’s state pensions when they are next updated. Soaring costs amid rising inflation will be duly met with a similar rise to the new pension rate.
After being suspended for a year due to the Covid-19 pandemic, the Treasury intends to return to the triple lock system. This is used to decide the extent of the increase in the value of the state pension in the new tax year, determined by the highest of either inflation, average earnings or a flat rate of 2.5%.
While the return of the triple lock has been positively received, the government has come in for criticism for not matching this increase for public sector workers who are calling for similar raises to their salaries. The argument made by the prime minister’s official spokesman, as reported by the i, is that people on state pensions were disproportionately affected by high energy costs.
