Will the Government keep its state pension triple lock promise this time?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 26 August 2022

⏱️ 49 minutes

🔗️ Recording | iTunes | RSS

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Summary

Inflation is soaring and if predictions are correct, it would result in the Consumer Prices Index measure hitting 13 per cent this autumn.

That could result in a state pension rise of around £1,000 a year to £10,900 while even at the current level of 10.1 per cent it would be upped to £10,600.

However, last year, the triple lock was scrapped. Would a new Prime Minister dare do the same this time around? Lee Boyce, Tanya Jefferies and Georgie Frost discuss.

Inflation is hitting those with pensions in different ways, we explain how and Tanya unearths yet more errors at the DWP.

She explains why – if you, or someone you know, was refused a state pension or given an unexpectedly low award when you turned 66 – it could be worth challenging.

Data also suggests that some workers are opting out of private pensions or reducing contributions thanks to the rise in the cost-of-living. Is that a wise decision?

Outside of pensions, we had calculations this week that inflation predictions are undercooked and could actually peak at 18.6 per cent early next year, with base rate having to reach 7 per cent to stop it.

It comes as the energy price cap is now forecast to reach £5,500 in April 2023.

And finally… the number of homes available to rent has halved in two years pushing prices through the roof.

According to research, tenants are effectively losing a bedroom if they spend the same amount of money today on a property compared to two years ago. What next for the rental market?

Transcript

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0:00.0	Welcome to This Is Money Podcast. I'm Georgie Frost and joining me and Deputy Editor Lee Boyce today is Pensions and Investments Editor Tanya Jeffries. And coming up with inflation soaring, will the government keep its triple lock promise this time round? Refuse to state pension. Tanya doesn't believe we can trust the DWP to find the errors, so we'll tell you how to fight it yourself. Plus, we're being urged not to pull
0:21.8	the plug on our pension contributions if we can possibly help it. We look at how much it could cost
0:27.0	you in the long run if you do. Also today, just how high will inflation and interest rates go?
0:33.0	And as rents go up, tenants trade down. Don't forget you to up to date with all the latest
0:37.2	breaking money news. Just go to this ismoney.com.com or download the app.
0:42.3	Market updates and conversations around the financial world don't have to be boring.
0:46.5	The Digest and Invest podcast by E-Toro is a great way to tune into what's happening in a fun
0:51.2	and easily digestible format. Discover the Digest and Invest podcast at Eutoro.com forward slash academy forward slash podcasts.
0:59.3	But first, the state pension could rise to nearly 10,900 pounds a year.
1:04.7	That's over a grand more.
1:06.6	If the government returns to the triple lot commitment, that is, the one that it broke this year.
1:11.2	The Bank of England has forecast CPI to top 13% this autumn when the calculations will be made.
1:17.8	Even at the current 10.1% pensioners could see their payments hike to £10,600.
1:23.0	So will they and should they?
1:26.8	Welcome to you both tenure, just us, if you would, the triple
1:30.1	lot commitment. It means that the state pension should rise by the highest of inflation,
1:37.9	average earnings growth, or 2.5%. And over the years that it's been in place, all of those three measures have been used.
1:46.4	Who came up with it? And why? Why those three? Why 2.5? What was the thinking?
1:52.2	I think it was David Cameron invention. And they've never managed to get out of it until last year.
1:58.4	Some people think that it's wrong to have it because the 2.5%
2:02.5	means it's always being pulled in an upward direction no matter what. And eventually that
2:08.5	makes it unaffordable. But others take the view that the state pension is very low compared
	...

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