On Wednesday, 23rd of March 2022, Chancellor Sunak confirmed to the treasury committee that the pension triple lock will apply until 2023/24.
This will see an increase of approximately 7.4% based on the expected Consumer Price Index (CPI) level for this September.
In September 2021, the government announced the suspension of the triple lock for pensions in 2022/23 due to fears of an 8% increase which would cost the economy £3bn. Yet, in the Spring Budget, Sunak announced that the triple lock will remain until 2023/24.
Although this is great news for pensioners, pension contributions will be affected by the recent changes to NIC. As pensions are much like a pay-as-you-go basis through NI earnings, the higher the threshold will mean a lower NI receipt and less money available to pay to state pensioners.
The new full state pension will give pensioners £179,60 per week. However, the actual amount will depend on each individual’s national insurance record.
Aegon Pension director Steve Cameron stated:
“Renewed commitment from the government to the state pension triple lock will offer some reassurance to state pensioners.”
“Looking ahead, there’s a good chance that state pensioners will be in for a bumper increase in April 2023. The Bank of England’s latest prediction is that inflation might reach 8 per cent in the spring and could be even higher later in the year.”