Pensions triple lock scrapped for millions of Brits
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
The Government had been working on the assumption inflation will peak at 3.9 percent this year, Express.co.uk understands. But the energy crisis engulfing the country has led to a revision in forecasts.
Earlier this month Work and Pensions secretary Therese Coffey announced the Government was pausing its pensions triple lock.
The mechanism, first introduced by the coalition government in 2010, would ensure a substantial rise in payments every year.
Pensions would rise by average earnings, inflation as measured by the Consumer Prices Index (CPI), or 2.5 percent, whichever was highest.
The coronavirus pandemic had led to fears average wages would rocket by as much as eight percent due to millions of workers coming off furlough.
Ms Coffey said due to the “statistical anomaly” the Government was announcing a one year pause on the triple lock and pensions for 2022-23 would only rise by the highest out of inflation or 2.5 percent.
“At a time when we have made tough decisions to restore the public finances which have impacted working people, such as freezing income tax personal thresholds at current levels, [the triple lock] would not be fair,” she told MPs in the Commons.
Chancellor Rishi Sunak has been grappling with how to bring down the UK’s debt.
The Treasury has borrowed over £400billion since the start of the pandemic, taking total debt to over £2trillion.
Temporarily removing the triple lock is one of a number of measures being adopted by Mr Sunak in a bid to reduce the deficit as the country emerges from the pandemic.
Insiders say that based on figures previously provided by the Bank of England, the Work and Pension Department were expecting CPI inflation to peak at 3.9 percent.
However, following a meeting of the central bank’s Monetary Policy Committee (MPC) yesterday, the inflation forecast was increased from its August prediction.
It is now expected to rise above four percent, owing to the energy crisis.
The rate is likely to remain into next year.
MP warns of drivers panic-buying petrol as forecourts close amid chaos [UPDATE]
Online tool explains how to boost state pension amount [INSIGHT]
State pension savers warned they could be missing £5,000 boost [WARNING]
The Bank of England said in a statement: “CPI inflation is expected to rise further in the near term, to slightly above four percent in 2021 Q4, owing largely to developments in energy and goods prices.
“The material rise in spot and forward wholesale gas prices since the August Report represents an upside risk to the MPC’s inflation projection from April 2022.”
If the forecast proves correct it means the state pension will rise by a bigger amount next year than originally expected by the Government.
The soaring price of wholesale gas has forced up the price of energy.
As a consequence, the crisis has also led to a shortage of carbon dioxide.
Britain relies heavily on two plants to make carbon dioxide used for fizzy drinks, stunning animals before slaughter for meat production and making dry ice fresh food transportation.
CF Fertilisers, one of the two main providers, was forced to temporarily shut due to the gas price rise before reaching an agreement with the Government to restart production.
However, there are warnings the shortage of CO2 and the rise in cost in making it will increase prices and increase inflation.
Source: Read Full Article