State pension rise WIPED OUT as soaring energy prices leave retirees worse off

Brexit has triggered 'explosion' of investment says Rishi Sunak

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Rishi Sunak’s suspension of the triple lock pension means retirees are due to receive a 3.1 percent increase in their payments, despite average earnings rising by considerably more. The Treasury scrapped criteria requiring them to increase state pensions by the highest out of inflation, average earnings or 2.5 percent for 2022-23, saying wages were due to shoot up because of a “statistical anomaly”.

The ending of the furlough scheme meant official data showed earnings were set to rise approximately seven percent.

The 3.1 percent CPI inflation level means the new state pension is set to rise from £179.60 per week to £185.16 from next April.

However, the rise in the cost of wholesale gas means the energy price cap is set to rise next spring by as much as £383 a year.

It equates to a £7.37 increase a month, cancelling out the £5.56 rise in state pension payments.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown: “The 3.1 percent increase was a touch under what many expected and will come as cold comfort to pensioners bracing themselves for soaring energy bills this winter.

“If the triple lock had not been suspended pensioners would have been in line for a blockbusting state pension increase of around seven percent.

“While many pensioners have other sources of income to fall back on the state pension still forms the backbone of many peoples’ retirements and too many are wholly reliant upon it.

“In addition, not everyone receives the full amount with recent HL analysis showing more than two million pensioners get less than £100 per week in state pension.

“While working households will also need to prepare for rising bills pensioners will be particularly vulnerable to these increases.”

The Chancellor is under pressure to announce plans next week to help households combat the energy cost crisis.

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He will deliver his Budget outlining the Government’s tax and spending plans to MPs in the Commons next Wednesday afternoon.

The Treasury has already launched a £500million hardship fund to support those who are vulnerable in the winter months.

The new money will be made available to local councils to hand out as they see necessary.

It can be used to help fund small grants to pay for daily needs such as food, clothing, and utilities.

Announced last month, Mr Sunak said the extra money would “provide a lifeline for those at risk of struggling to keep up with their bills over the winter”.

He added: “Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.”

However, critics have warned the money is nowhere near enough to combat a rise in prices.

The Government has pledged to restore the triple lock for next year.

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