Triple Lock & State Pension Age

Triple Lock

Pensioners will only be £20 better off this year after the Triple Lock is nearly wiped out. The Resolution Foundation said that Jeremy Hunt's six-year freeze in income tax thresholds will cost retirees dearly.

It said that an 8.5% rise in the state pension will leave pensioners £190 better off in the next tax year after adjusting for higher prices. This will be offset by the freeze in income tax thresholds, which will cost pensioners £170 meaning they stand to gain just £20 overall.

£221.20 is frequently mentioned for the state pension per week but this is a mythical figure for most older people. As many as 9.4 million receive the old state pension which will rise to £169.50. Only 3.2 million pensioners are in receipt of the new state pension and just one in ten of those have enough contributions receive the maximum amount. Civil Servant's National Insurance contributions were contracted out unbeknown to most to cover their civil service pension, so their state pension is reduced accordingly.

Recent research by Loughborough University estimated that a single person needs £14,400 per year minimally to survive. Those on the top of the old state pension receive only 60% of that.

The Tories have stated that the Triple Lock will be in their manifesto yet have said to pay for the Triple Lock they may have to push back the state pension age to 68.

Labour has said it is committed to retaining the Triple Lock but is yet to confirm that pledge will feature in its election manifesto. Keir Starmer said that we will have to see what the state of the economy is as we go into an election.

State Pension Age

The International Longevity Centre UK has just warned that the state pension age will have to increase to 71 by 2050 to maintain the number of workers per retiree.

Currently the state pension age stands at 66. It will increase to 67 between May 2026 and March 2028. From 2044 it is expected to rise to 68 with further pressure to raise to 68 or 69 before then.

But a rising number of people are being pushed out of the workforce in their 50s and 60s due to ill-health or they have caring responsibilities and it’s a real struggle to get back into work. Waiting even longer for an income from a state pension from 66 to 71 will be devastating.