State pensioners face income problems even after a threefold increase, as the loss of the winter heating allowance offsets the gains.
State Pensioners Will See Their Income Fall by £475 Despite Triple Lock Increase
By Arezki AMIRI
Published on 17 October 2024 14:29
UK state pensioners are angry that, despite the increase in Triple Lock payments, they will still suffer a real loss of income due to the rising cost of living under the new Labour government.
Almost 500,000 state pensioners meanwhile will not be able to claim the promised £475 payout next year as has been billed and further aggravate such adverse conditions.
The country has continued the Triple Lock system which ties the increase of pensions to the growth in average earnings, the rate of inflation or 2.5%, whichever is the highest. The government has projected an increase of 4.1% which is in line with the increase in average earnings.
This will increase the full new state pension to £230.30 a week, an increase of £9.10. However, this will be an increase that occurs as pensioners are deprived of the Winter Fuel Payment which is of great assistance during the cold months
Loss of Winter Fuel Payment Worsens Financial Outlook
Richard Parkin, head of Retirement at BNY Investments, highlighted the issue: “The Triple Lock is designed to prevent pensioners’ living standards from falling behind workers. The loss of the Winter Fuel Payment represents a real hit to income, regardless of personal wealth.”
Parkin observed that elderly pensioners with lower state pensions often do not benefit from the increase in the Triple Lock, as it fails to offset the loss of Winter Fuel Payment – particularly at this time of rising inflation.
He further expressed optimism that perhaps there could also be an increase in Pension Credit along with state pensions, stressing however that such issues will only be clear in the next Budget.
Impact of Rising Costs and Energy Bills on State Pensioners
Greg Marsh, the CEO of Nous.co, an AI savings platform, stated that many pensioners will practically see the increase in the Triple Lock considerably wiped out by the absence of the payment for Winter Fuel. He emphasized that many will barely make it to winter when it comes to bill payments and urged many to look for how they can save.
Marsh advised pensioners to review their energy bill arrangements: “Households that pay by direct debit can save around £100 annually compared to those paying by cash or cheque.” He also encouraged switching providers to secure better rates, noting that most households are not on fixed deals and could save £150 on energy bills with platforms like Nous.co.