Meanwhile, the flat-rate state pension (paid to those who reach state pension age from 6 April 2016) increases by £5.55 a week, from £179.60 per week to £185.15 per week
CPI rose by 6.2% in February 2022 and is expected to increase still further this year – meaning the 3.1% increase will actually feel like a cut for millions of retirees
Had the earnings element of the ‘triple-lock’ been retained for 2022/23 the state pension could have been increasing by 8.3% today
Tom Selby, Head of Retirement Policy at AJ Bell, comments: “When is a pay rise not really a pay rise? When the cost of the things you buy are increasing by more than the extra cash you’re receiving.
“Sadly, that is exactly the position millions of retirees find themselves in today as the state pension rises by 3.1% - exactly half the 6.2% CPI inflation figure recorded in February this year.
“The reason is that traditionally the Government uses the inflation rate from the prior September used to uprate benefits. Unfortunately, this was before prices in the UK spiked.
“This comes after the Government chose to axe the earnings element of the triple-lock guarantee, with the £5 billion annual price tag of keeping this manifesto promise deemed too rich by Chancellor Rishi Sunak.
“Had the triple-lock been retained and an 8.3% earnings-linked increase applied, someone in receipt of the full flat-rate state pension would be seeing their weekly income bumped up to around £194.50 today.
“To put it another way, the move has cost them £9.35 per week in retirement income – or £486.20 over the course of the year.
“Clearly the choices facing a Government which has spent hundreds of billions of pounds paying people to not work during a Pandemic are difficult, but that is likely to be of little comfort to pensioners feeling the squeeze during this cost-of-living crisis.”
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