Boris Johnson has pledged to reintroduce the triple lock on state pensions after suspending its implementation last year. A return to the old formula means pensioners will see their payments increase by more than 10% in 2023.
The triple lock guarantees an increase of the higher figure on average incomes, inflation or 2.5%.
The full state pension is currently £9,628 a year meaning pensioners can expect an increase of nearly £1,000 as September’s inflation rate is due to hit 10 percent.
The triple lock system was introduced by the coalition government in 2010 to allow pensioners’ incomes to keep in line with workers’ incomes.
However, the Bank of England and economists have warned that pension increases in line with inflation risk fueling further price rises.
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Downing Street has defended the decision to reinstate the triple lockdown despite the government’s opposition to wages keeping pace with rising costs of living.
Mr Johnson told Cabinet this morning: ‘It is right that we reward our hard-working public sector workers with a pay rise, but it must be proportionate and balanced.
“Higher and sustained levels of inflation would have a much bigger impact on people’s wages in the long run, destroying savings and prolonging the difficulties we face for longer.”
Deputy Prime Minister Dominic Raab told BBC Radio 4’s Today program on Wednesday June 22: “They [pensioners] are particularly vulnerable and are disproportionately affected by the rising energy costs that we know everyone is facing.
He said the government had committed £37billion to help people cope with rising costs and added: ‘At the same time, we need to stop making the problem worse by fueling wage demands that will not seeing inflation stay higher for longer and that only hurts. the poorest the worst”.
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Public sector workers, including striking railway staff, are being urged to accept the ‘sacrifice’ of below-cost-of-living wage deals to avoid a wage spike that puts further pressure on prices.
When asked why state pensions would rise in line with inflation but public sector wages would not, the prime minister’s official spokesman said: ‘It’s always about finding the right balance when it comes to ensuring that we fairly reward our public sector workers while also not doing anything irresponsible with public finances more broadly.
“The Chancellor has to look at all of this as a whole and I think the view is that we can deliver on that commitment without fueling inflationary pressures, but you know we’ve made tough decisions on the triple lockdown with a temporary suspension of a year. “
The triple lockdown has been suspended for 2022, with pensions secretary Theresa Coffey saying last September that the move would avoid large increases caused by a “statistical anomaly”.
Several Tory MPs were frustrated by the move over the Party’s pledge to maintain the triple lockdown in its 2019 election manifesto.
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