The state pension is set to rise next spring, but older pensioners could miss out on significant increases. Under the new Labour government led by Prime Minister Andy Burnham and Chancellor John Healey, the triple lock has been committed to for this parliament. However, analysis suggests that basic state pensioners, born before 1951 for men and 1953 for women, could receive £59 a week less than the new rate.
Triple Lock and Projected Increases
The triple lock policy ensures the state pension rises annually by the highest of inflation, wage growth, or 2.5 per cent. Latest expert projections indicate a 4.8 per cent increase next April, matching the rise implemented this year. If applied, the basic state pension would reach £193 per week, while the new state pension would climb to £252 per week, creating a £59 gap.
Political Promises and Pressures
Mr Burnham, facing scrutiny over economic credibility, has reiterated his commitment to the triple lock for the duration of this parliament. Yet, uncertainty remains about its future beyond the next election. Lord O'Neill, a former Treasury minister, has criticised the policy, calling it “bonkers” and suggesting means-testing could be more sensible. He accused the government of being “hemmed in” by manifesto promises and compounding this with large spending commitments in areas like health and school buildings.
Fiscal Discipline and Investment Calls
Lord O'Neill has also urged the government to borrow billions more for infrastructure investment, telling the Guardian: “There is a lot more room under the existing fiscal rules to borrow for investment, and the next chancellor should take advantage of that. We can do way more to boost infrastructure projects, and that is what we should be doing.”
Chancellor John Healey has announced his first Budget for October 28, promising plans “built on fiscal discipline”. The early days of Mr Burnham's premiership have seen a flurry of announcements likely to require additional spending, including cost-of-living measures such as a VAT cut on energy bills, reduced business rates for pubs, radical devolution plans for England, and expanded technical training in schools.
