State pensioners will receive a 10 per cent increase in their state pensions next year to stay in line with inflation. The Treasury plans to return to the ‘triple lock’ system, by which the state pension is increased annually in line with inflation, average earnings or a flat rate of 2.5 per cent, whichever is highest.
The April 2023 rise will be based on the consumer price index (CPI) this coming September, when it is expected to reach 10 per cent. The CPI for May reached 9.1 per cent, its highest figure since 1982.
The ten percent increase will mean an additional annual payment of around £960 for pensioners, representing a total cost of £10bn for the taxpayer.
A Downing Street spokesperson defended the decision despite public sector workers calling for similar raises to their salaries to help workers with increasing costs. The bumper rise in pensions comes at the same time that ministers are insisting that public sector workers like train staff, teachers and nurses temper their requests to cool rampant inflation. Currently the RMT union, which represents rail workers, are holding strikes in part to secure better wages. The RMT is calling for a pay rise of 7%, while employers have offered a maximum of 3%.
Speaking to the BBC’s World At One today (Wednesday 22nd June), former Conservative Chancellor Ken Clarke said the government should, ‘Stop giving me money. I’ve got £1,100 out of the latest package from the government – it’s absurd, I’ve got two houses… I don’t need it.’ In reply, Work and Pensions Secretary Therese Coffey said Lord Clarke could ‘send a cheque back to HMRC if he feels that strongly about it.’
The State Pension for newer retirees is currently worth £185.15 a week or around £9,600 a year. Those who retired before the 2016 overhaul of pensions receive £141.85 a week, or around £7,400 a year, plus top-ups related to their earnings.
A 10 per cent rise would add £18.50 increase to the single-person’s basic state pension, taking it to £160.35. The newer state pension will rise to £203.70.