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State pension set to rise by double figures to protect elderly from inflation

today26 June 2022 5

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Downing Street has confirmed the state pension will be rising by double figures to protect pensioners from inflation. Ministers have pledged that the triple lock on pensions will return in April 2023, this raises them by the highest of 2.5% average wages or inflation.

In a written answer to Parliament, Simon Clarke, Chief Secretary to the Treasury, said this was “likely to be significantly higher than the forecast inflation rate for 2023/24.” This is due to the annual pension rises being based on CPI inflation several months before they actually go up.

Pensions only rose 3.1% this year, which was much less than inflation at the time. However, it means next year they could rise over 10%. This would be more than inflation by the time the rise occurs, and benefits are also likely to rise by inflation, reports the Daily Mirror.

Read more: Nottingham MP donates £2,000 of salary to rail strikers

Boris Johnson and Chancellor Rishi Sunak suggested that more than five million public sector workers will get rises of less than inflation, a real-term wage cut. The pay reviews of teachers and nurses are due to report back imminently, and Mr Johnson reportedly told his cabinet that “the public would expect the Government to stick within their means at a time of global cost of living pressures.”

The PM’s spokesperson confirmed that he agreed with Chief Secretary to the Treasury, Simon Clarke, who said that raising the public sector pay by 9% or 10% would not be sustainable. This could mean a real-terms pay cut for millions of workers, risking a Summer of Discontent as strikes continue to spread.

Pay is one of the issues that RMT rail union members have been striking over, in addition to working conditions and job cuts. Mr Sunak emphasised “that the Government had responsibility to not take any action that would feed into inflationary pressures, or reduce the Government’s ability to lower taxes in the future,” said No10.

When asked if public sector workers should just accept they’re going to get a real-terms pay cut, Boris Johnson’s spokesman replied: “We will have more to say once we’ve got [pay review] reports in.

“But you will have heard Simon Clarke yesterday talk about the importance of not feeding into inflationary pressures, and that point was emphasised by the Chancellor again today. And the Prime Minister does very much agree with that.”

The difference of treatment between nurses and pensioners has been defended by Downing Street. Boris Johnson’s spokesperson has said: “Pensioners, particularly those who receive state pensions, are disproportionately impacted by higher energy costs.

“They can’t always increase their incomes through work, and they are more vulnerable to cost of living pressures. That’s, for example, why we introduced additional support for pensioners as part of our cost of living package, the pensioner cost of living payment of £300.”

They also argued when pensions go up “there’s not the same risk of a spillover effect into private sector wages.” When Mr Clarke gave his written answer, he said the triple lock would be “subject to a review” by ministers.

This has sparked some speculation that it could be dropped once the scale of rises becomes clear. When asked if he could absolutely guarantee pensions will rise with triple lock next spring, Boris Johnson’s spokesperson said: “That is exactly what the Treasury set out in a written parliamentary question this morning, that yes it is a temporary cut.”

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Written by: thehitnetwork

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