As inflation is expected to reach 7% later this year, the state pension is expected to ‘fall.’

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As inflation is expected to reach 7% later this year, the state pension is expected to ‘fall.’

EXPERTS have predicted that the state pension will “fall” in real terms later this year, as inflation is expected to reach 7%.

According to recent reports, if the energy price cap is raised in April as planned, inflation could skyrocket.

The energy price cap is the maximum amount a company can charge an average UK consumer for their electricity and gas usage in a given year.

This measure aims to prevent businesses from passing on rising costs to their customers, but the energy price cap is expected to hit £2,000 in a few months.

Households are bracing for a significant increase in their energy bills, which average around £1,277 per year, owing to the recent exponential rise in wholesale gas prices.

Experts warn, however, that pensioners will be hit hard by the impending crisis, as state pension payments may not be enough to keep homes warm until the worst of it passes.

According to The New York Times, internal government estimates suggest that the energy price cap could push inflation to 6.7 percent, the highest level in 30 years.

State pension payments are currently set to increase by 3.1 percent, in line with October’s inflation report.

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The Government controversially chose to scrap their triple lock pledge on the state pension, which saw payments rates increased by either the rate of inflation or a 2.5 percent increase in average earnings, whichever was higher.

The triple lock has been temporarily suspended to save money due to artificially inflated average earnings as a result of the pandemic.

According to experts, the government’s decision may prove to be short-sighted, as the expected “squeeze” in living standards is expected to disproportionately affect state pension claimants.

Pensioners would have seen an 8.3 percent increase in their incomes if the earnings link had remained part of the triple lock.

“Unless the government rethinks the 3.1 percent state pension increase, 12 million pensioners could face a significant squeeze on their living standards next year,” said Steve Webb, a former pensions minister and partner at LCP, last month.

“Not only will the state’s pension payments be reduced.

“News from the Brinkwire.”

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