Experts warned yesterday that next year’s inflation-busting pension and benefit increases will cost taxpayers approximately £15 billion.
After Rishi Sunak vowed to reinstate the triple lock, which safeguards increases, which was stopped earlier this year, older people are in line for a larger state allowance.
The Chancellor revealed on Thursday that assistance claimants will get increased payments next year.
This is because the benefit and pension rates from April next year will be linked to the inflation rate in September this year, when it is expected to hit 10 per cent.
It will then fall in 2023, meaning that when the pension and benefit rises are introduced they will be higher than the rate of inflation.
The Resolution Foundation think-tank yesterday welcomed the decision to boost benefit and state allowances, but revealed it will come with a massive price tag.
It said: ‘On current forecasts, this means that most benefits and the state pension are set for an increase of around 9.5 per cent, the largest nominal increase since 1991, and at an expected cost of around £15billion.’
The triple lock – a Tory manifesto commitment – ensures that the state pension will rise each year in line with average wage growth, inflation or by 2.5 per cent – whichever is highest.
Last September the Government confirmed it would suspend the triple lock for one year, following concerns that a post-pandemic rise in average earnings would result in pensions increasing by 8 per cent.
Earnings soared throughout 2021 after falling the year before during the Covid lockdowns.
The suspension was introduced despite Boris Johnson promising in his 2019 election manifesto to maintain the triple lock formula.
Bank of England Governor Andrew Bailey’s warning of ‘apocalyptic’ food price rises amid soaring inflation are ‘bang on’, the president of the National Farmers’ Union has said.
Minette Batters told Hay Festival in Hay-on-Wye, Wales, that Britain faced a ‘perfect storm’ of factors and that the war between Ukraine and Russia, which together produce 30 per cent of global wheat exports, was ‘a game-changer’.