State pensioners will be 'worse off' in real-terms after £460 Triple Lock hike

A £460 Triple Lock increase next April will leave state pensioners "worse off", it has been warned. As energy bills rise by £100 this winter, and with pensioners losing £300 Winter Fuel Payments and £300 Cost of Living payments, pensioners face being worse off in real terms.

Steve Webb, a partner at pension consultants LCP, who is a former Liberal Democrats Pensions Minister, warned: “Part of next April’s increase is simply to keep pace with rising prices. Based on the current inflation figure of 2.2 per cent, the new state pension would need to rise by just over £250 simply for pensioners to stand still.

"Whilst an above-inflation increase of £460 will be welcomed, only the further £210 represents a real increase. And this is before allowing for the income tax which most pensioners will pay on their state pension rise. Those who lose £200 or £300 in Winter Fuel Payments will therefore still be worse off in real terms next April.”

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"And this is before allowing for the income tax which most pensioners will pay on their state pension rise," he said. "Those who lose £200 or £300 in Winter Fuel Payments will therefore still be worse off in real terms next April.”

The figure for average wage growth has today (Tuesday 10 September) been confirmed as 4% by the Office for National Statistics. As this is higher than the current 2.2% rate of inflation, it means the state pension is likely to increase by 4% or by up to £8.85 a week.

But Money Saving Expert, which was set up by Martin Lewis, the BBC and ITV star, has warned September's CPI isn't published until mid-October, which is when the Government is expected to confirm any rise.

Under the so-called 'triple lock' commitment, the state pension typically goes up each April by whichever is the highest of average wage growth between May and July (including bonuses), September's Consumer Prices Index (CPI) inflation measure, or 2.5%.