State pension scandal – pensioners may miss out on higher inflation in 2023 ‘Just half that amount’ | Personal finance | Finance


Instead of getting a double-digit pay raise, they may only get half of it. It will hurt the poorest and oldest pensioners and must be stopped, a senior pensions campaign official told Express.co.uk.

Under the triple lockdown, the state pension increases each year based on earnings, inflation or 2.5%, whichever is greater.

The government controversially refused to pass on an 8.3% increase in revenue from April this year, saying the figure had been “skewed and distorted” by the pandemic.

Instead, he raised the state pension by just 3.1%, sparking outrage as inflation spiked thereafter.

Prime Minister Liz Truss has pledged to reinstate the triple lock, meaning the state pension is set to rise in line with inflation from April 2023.

However, the triple lock never applied to Pension Credit, a means-tested state pension supplement for the poorest pensioners.

As a result, they can get a much smaller raise.

Instead, it lowered the pension credit increase to 3.1%, in line with the reduced state pension increase.

State pensions will almost certainly increase in line with inflation from April 2023, but there is no such guarantee for the pension credit.

This is a blow as next year’s state pension increase will be based on September’s inflation rate, which could reach 11 or 12%. We’ll know for sure when the figure is released on October 18.

Yet if the pension credit returns to its link to earnings, the poorest retirees could get a raise of just 5.5%.

This figure is based on the three-month revenue average through July.

Former pensions minister and political activist Baroness Ros Altmann said this was a real danger and would be an absolute outrage. “That leaves retirees with little protection against today’s price spike.”

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Baroness Altmann is an important figure as she fought last year against the decision to scrap the earnings-related pension credit increase. “I led a rebellion in the House of Lords which changed the legislation, but MPs refused to support it.

“This has left poorer pensioners without the income protection they once enjoyed.”

Now she is asking the government to do the right thing and increase the pension credit in line with inflation from April. “That way it will increase in line with the state pension, giving everyone fair treatment.”

However, there is no guarantee that this will happen. Because the link to income was enshrined in law, the government could use it as an excuse.

Even though ministers suspended the law when it suited them.

Altmann said, “We hope the government won’t try to trick pensioners into using this legal exit clause.”

The pension credit may increase with inflation, but there is a real risk that this will not happen.

“I hope if Express.co.uk highlights the danger it might deter the government from taking such harsh action,” Altmann added.

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