A Whitehall source told the Daily Telegraph: “I think this sounds noisy. If you are going to stick to the inflation line, you have to show restraint in all areas. “People will start to see through the contradictions. If we limit ourselves to this old age, it obviously does not have a very long lifespan.” “We are not just dealing with inflation, we are dealing with stagnant inflation, and the only way to overcome any aspect of it is to encourage high levels of growth in the private sector, which will lead to higher productivity,” said David Davis, a former Torres secretary to Brexit. . “While it makes perfect sense to protect the poor, the government should encourage growth.” Jonathan Cribb, deputy director at the Institute for Fiscal Studies, said the policy was “unsustainable in the long run” and continued to push up public finances “in a way that is almost unpredictable for the government”. He added: “An inflation shock like this, which reduces the value of real wages: tends to benefit both people with benefits whose incomes tend to rise in line with inflation and those of state pensioners. That is the consequence of an inflation protection system. “ Former Secretary of the Treasury Sir Nick Macpherson tweeted: “If the real wages of workers need to be reduced, as HMG and the Bank of England argue, it could mean that those working need to pay more taxes to finance the pension. they increase. “ It is also unclear how the increase in benefits in line with inflation, while warning of similar wage increases, helps to achieve the government’s public ambition to encourage more people to work. A 10% increase would add, 18.50 a week to state pensions, or £ 962 a year, and increase the pension bill by about δι 10 billion. For those receiving a full new state pension, their annual payments are set to exceed .000 10,000 for the first time or 21 21,000 for couples. This will cost the Ministry of Finance about 10 10 billion. The average number to increase benefits by 10% is difficult to calculate, as it depends on a person’s circumstances. However, estimates suggest it could cost close to another 10 10 billion.
What is the triple lock of pensions and how does it work
By Tim Wallace The triple pension lock was introduced in June 2010 by George Osborne in one of his first acts as Chancellor of the coalition government. The policy guarantees that the state pension increases every April by what is higher than consumer price inflation last September, the annual wage increase last July or, if both are low, 2.5%. The idea was for pension increases to keep pace with rising living costs. “Retirees will have the income to live with dignity in retirement,” Osborne told Labor, adding that “there will be no more 75cm increases in the basic state pension.” The idea was that retirees’ incomes had squeezed over time from inflation and the poor elderly needed financial support. In that year ‘s election campaign, the Liberal Democrats argued that “it’s unfair every year for retirees to lag behind workers more” than workers, thus demanding a link between pensions and wages. As a guarantee, it fluctuated – in April of this year the upgrade was limited to the highest number between inflation or 2.5%, as distortions of Covid and the leave regime had increased wages by more than 8%. As a result, the state pension increased by 3.1%, according to inflation last September. This year the triple lock is back. Unless something dramatic happens with wages, which rose 6.8% in the quarter to April, inflation will be the highest. The Bank of England expects prices to rise by at least 9.5% in the third quarter of the year – which includes September. For someone with a full new state pension of 185 185.15 a week, this would be a boost to 3 203.67 or just over 6 9,600 a year to almost 6 10,600 a year. Next year’s rise in inflation also represents a significant additional cost for the Treasury. The total budget for state pensions is expected to reach just over 110 110 billion this fiscal year. A jump of 9.5% will raise it over 120 billion £. Benefits such as universal credit and child benefit increased by 3.1% in April and are expected to increase by 9.5% next year – linked to inflation, but do not have the broader boost that triple-lock pensions receive .
