New figures released by the Office for National Statistics (ONS) show that Consumer Prices Index (CPI) inflation reached 10.1% in September, compared with 9.9% in August. This matches the 40-year high inflation hit in July and remains well above the UK Government’s target of 2%.
The September reading is important for the Treasury as the figure is commonly used as the benchmark to raise benefits and the State Pension for the following April, however, Chancellor Jeremy Hunt would not commit to the Triple Lock. But, during PMQs in the House of Commons on Wednesday, Prime Minister Liz Truss did confirm the UK Government's commitment and said: "We are protecting the Triple Lock on pensions”.
The September inflation figure is one key component of the State Pension Triple Lock formula. The Triple Lock guarantees that State Pensions grow in line with whichever is highest out of earnings, inflation or 2.5% and was introduced to help give pensioners a decent minimum level of income which would keep pace with growth in workers' earnings.
Chancellor Jeremy Hunt said on Wednesday morning he would prioritise help for the vulnerable after the inflation increase was revealed.
Mr Hunt said: “I understand that families across the country are struggling with rising prices and higher energy bills.
“This Government will prioritise help for the most vulnerable while delivering wider economic stability and driving long-term growth that will help everyone.
“We have acted decisively to protect households and businesses from significant rises in their energy bills this winter, with the Government’s energy price guarantee holding down peak inflation.”
State Pension rates for 2023/24 under Triple Lock
If the UK Government uprates benefits by inflation, 10.1% is the percentage they will be increased by and this will come into effect from next April.
This would see New State Pension payments go up from £185.15 per week to £203.85 and Basic State Pension weekly payments rise from £141.85 per week to £156.20.
If wages data (5.5%) is used, the New State Pension would rise to £195.35 per week and Basic State Pension to £149.65.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “In the latest twist in the Triple Lock saga, Prime Minister Liz Truss has again reiterated commitment to the State Pension Triple Lock which means pensioners could be in line for a 10.1% increase next year.
“This comes after new Chancellor Jeremy Hunt initially refused to confirm the Triple Lock would be returning after being suspended last year.
“The uprating doesn’t tend to be confirmed until November, but this announcement will come as a huge relief to pensioners who have been banking on an inflation linked increase after their budgets have come under intolerable pressure in recent months.
“The Prime Minister had said she would keep the Triple Lock several times during her leadership campaign, but there were concerns that when faced with a gap in public finances the new Chancellor might be tempted to shelve an inflation-linked increase.
“After such a trying time, pensioners need certainty about how their State Pension will be uprated, and there still may be worries that given the pace of U-turns we have seen, this latest promise can’t be guaranteed."
Ms Morrissey continued: "Longer term we may well see calls to reform the Triple Lock increase, but any such reform will need to happen alongside consideration of how the State Pension age is due to be increased.
"A review on this issue has been submitted to the UK Government and is due to be published next year. Any changes to the triple lock will need to take its findings into account.”
The Triple Lock and benefits uprating decision is expected to be announced by the Chancellor on October 31.
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