State pension increases may be watered down by Tories costing people £74 a year

18 October 2023 , 19:59

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OAPs could be in line for a pension shock (Image: Getty Images/iStockphoto)

Millions of older people risk being up to £74 a year worse off if the Tories water down a state pension hike next year.

The benefit for 12 million pensioners is due to rise by 8.5% in April under the triple lock pledge. This is supposed to mean the state pension increases in line with whichever is highest out of average wage growth, inflation or 2.5%. Wages are currently outstripping inflation, at 8.5% including bonuses.

But this figure also includes one-off payments to NHS staff and other public sector workers. Industry experts Aegon say if these payments are discounted, the state pension would rise by £826.82 to £11,427.02 a year, instead of £11,501.22 – a difference of £74.20. The old rate, for those who reached state pension age before April 2016, would rise by £633.55 to £8,744.95, instead of by £690.40 to £8,812.80 – £67.85 less.

State pension could rise to £11,427.02 a year instead of £11,501.22 (Getty Images)

Steven Cameron, pensions director at Aegon, warned trimming the increase would “risk the wrath of the pensioner population”. Alice Guy, from Interactive Investor, said those who rely solely on the state pension would face a shortfall of more than £2,600 a year in their basic needs, even with an 8.5% rise.

Joanna Elson, from Independent Age, said: “The cost of living remains extremely high, and we have heard harrowing tales, from not showering daily because of high water costs, to eating dog food because it’s cheaper.” A Department for Work and Pensions spokesman said: “The Government is committed to the triple lock. The Secretary of State will conduct his statutory annual review using the most recent data available.”

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