‘Attacking’ it would be a ‘seriously high-risk and deeply unpopular move’

More than two-thirds of UK adults support an inflation-matching increase in the state pension next year, AJ Bell research has found.
Of the 4,000 Brits asked if they backed increasing the state pension in line with wage growth, inflation, or not at all, the overwhelming majority (86%) felt the state pension should increase next year.

Most (68%) said they backed an inflation-linked increase, while a further 18% said it should be aligned to wage growth.

Just 3% felt it shouldn’t go up at all next year and a further 11% said they aren’t sure.

Although support for an inflation-matched increase was strongest among older people, in every age group the majority of people backed maintaining the triple-lock by increasing the state pension in line with inflation.

Promises, promises
In its 2019 manifesto, the Conservative party committed to maintaining the triple-lock, which guarantees the state pension will increase each year in line with the higher of inflation or wage growth, or a minimum 2.5% if both are below that level.

During her brief spell as prime minister Liz Truss pledged to uphold that commitment. However, that has since been cast into doubt as Rishi Sunak and chancellor Jeremy Hunt weigh up options to balance public finances.

Increasing the state pension in line with inflation next year would see it rise by more than 10% to over £10,000 a year for the first time. The increase would be in line with September’s Consumer Prices Index (CPI) inflation figure of 10.1%.

Under triple lock rules, state pensions increase every year according to inflation, earnings or 2.5% whichever is highest. Wage growth figures for May-to-July 2022 came in at 5.5%.

Breaking the triple-lock commitment would likely mean the state pension would only increase by around 5% in line with wages instead, saving the government an estimated £5bn ($6bn, €5.7bn) a year.

‘Deeply unpopular move’
Tom Selby, head of retirement policy at AJ Bell, said: “While the chancellor is clearly scrabbling around for potential cost savings ahead of his Autumn Statement this week, attacking the state pension triple-lock would be a seriously high-risk and deeply unpopular move.

“Unsurprisingly, those over the age of 55 are the most likely to back an inflation-linked boost to the state pension next year, with over eight-in-10 saying the government should stick to its manifesto pledge.

“Support wanes somewhat when you ask younger people, but even then inflation protection remains by far the most popular option, backed by over half (52%) of those aged 18-34.

“Of course, ditching the triple-lock and increasing the state pension in line with average earnings would save the Exchequer a pretty penny – somewhere in the region of £5bn. And because the state pension would be permanently lower, that saving would be made every year.

“However, given the likely backlash this would generate, particularly among older voters, Jeremy Hunt may want to look elsewhere as he attempts to balance the UK’s books.”

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