POLL: Is a weekly state pension of £137.60 enough to live on?
RISHI SUNAK is about to break the triple lock, fearful that a large increase in state pension payouts will put the Treasury in financial trouble. However, activists contend that a significant increase is long overdue and that the current basic state pension, which is around £137 per week, is inadequate. This website would like to hear what you have to say, so please vote in our poll and leave your thoughts.
Due to the economy’s transition from complete ‘lockdown’ to spending-spree eutopia, inflation has reached a new high of 8.8% this fiscal year. If Chancellor of the Exchequer Rishi Sunak decides to maintain the triple lock policy in place, as promised in the Conservative platform, retirees might get an extra £12 per week starting in April of next year.
However, the traditional guarantee that state pensions will rise to the highest of inflation, average wage growth (in Great Britain), and 2.5 percent is under jeopardy.
Inflation for state pensions is typically around 2.5 percent per year, thus a rise of 8% would be a significant drain on government funds during a downturn.
The triple lock costs the government around £0.9 billion for every 1% increase, so an 8% increase would cost around £7.2 billion.
Kate Bell, the Trades Union Congress’s Chief Economist, opposes breaching the triple lock and believes that a big increase in the state pension is exactly what this country requires.
She claims that the present state pension of £137 per week is insufficient in comparison to current average earnings.
“I believe it will be welcome if it catches up just a little bit faster this year,” Ms Bell remarked.
Professionals in the financial business, on the other hand, believe that a compromise must be reached in order to provide a significant increase in pensions, but not one as large as 8.8%.
The government should “smooth out the abrupt peaks and troughs we’re seeing in earnings growth and base triple lock increases on experiences across two or more years,” according to Steven Cameron, pensions director at Aegon.
According to Sarah Coles, a personal financial analyst at Hargreaves Lansdown, “some element of smoothing applied to the wage data” is required.
“It would ensure the spikes are evened out to a more gradual growth, allowing seniors to preserve the wonderful value of the triple,” she said.