Pensioners ‘deeply disappointed’, particularly women and self-employed
The earnings benchmark of the State Pension triple lock will be temporarily set aside for next year. The Department for Work and Pensions (DWP) confirmed on 7 September that the State Pension triple lock rule will not be applied for the 2022/23 financial year over concerns of the potential costs involved.
It comes after the Office for Budget Responsibility (OBR) said in July that pensioners could see their payments rise by as much as 8% due to the guarantee. The triple lock guarantees that pensions grow in line with whichever is highest out of earnings, inflation or 2.5%.
Average
earnings
component
disregarded
Work
and
Pensions
Secretary,
Therese
Coffey,
said the
average
earnings
component
would be
disregarded
in the
2022/23
financial
year. ‘I
will
introduce
a Social
Security
Uprating
and
Benefits
Bill for
2022/23
only,’
she told
the
Commons.
‘It will ensure the basic and new State Pensions increase by 2.5% or in line with inflation, which is expected to be the higher figure this year, and as happened last year, it will again set aside the earnings element for 2022/23 before being restored for the remainder of this Parliament.’
Skewed
and
distorted
statistical
anomaly
Ms
Coffey
said the
figures
had been
‘skewed
and
distorted’
by the
average
earnings
rise,
which
she
described
as a
‘statistical
anomaly’.
She
said the
change
meant
that
pensions
would
still
rise,
but less
quickly.
The
triple
lock
would
return
the
following
year,
she
added.
Bedrock
of
many
pensioners’
retirement
income
Many
pensioners
will be
deeply
disappointed
that the
triple
lock has
been
scrapped
for next
year, as
the
State
Pension
is still
the
bedrock
of many
pensioners’
retirement
income.
Women
and
those
who are
self-employed
are
among
those
who will
be
particularly
affected
by the
temporary
scrapping
of the
triple
lock, as
they are
more
likely
to rely
on the
State
Pension
in
retirement.
However, it is encouraging that the government hasn’t abandoned its longer-term commitment. The 2.5% minimum rate has been used on a number of occasions, and is having the effect of slowly increasing what people receive in real terms. The long-term trajectory of the State Pension will also be more important to younger people, more than a one-off hike in line with earnings this year.
Content of the articles featured in this publication is for your general information and use only and is not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. For more information please visit www.goldminemedia.co.uk