The Government is legally required to increase the basic and new state pension each year in line with average earnings growth, CPI inflation, or 2.5 percent.
Under the triple lock, state pensions are expected to rise by at least 7.8 percent in April 2024, following a 10.1 percent increase in line with Consumer Price Index (CPI) inflation the previous year.
Mr Hunt is expected to confirm this 7.8 percent increase in his Autumn Statement on Wednesay 22 November.
The move is calculated to cost the treasury £90million a year prompting many people to ask whether the triple lock is sustainable.
An expert has argued that there may need to be reforms to the way the state pension is increased each year.
Martin Hartley, Group CCO of emagine Consulting believes the state pension triple lock system needs to be reformed as it “won’t be sustainable forever” and it is a policy that doesn’t fairly reflect the needs of this group of people.
Mr Hartley said: “We need to be introducing a policy that investigates whether a person’s occupation is fit for purpose by looking at their general health and wellbeing, to create a fair benchmark.”
The CCO suggested a different mechanism to work out pension increases, such as single lock policy, or implementing a means-testing approach.
Mr Hartley continued: “A single lock policy is an approach that would involve using only one factor, such as inflation or average earnings growth, to determine pension increases. This would be a more suitable way of assessing the landscape and ensuring everyone is looked after.
“Another strategy is to adjust earnings. Instead of relying on average earnings growth, the government could implement a policy that considers the connection between earnings and pensions, creating a more flexible system.
“Implementing a means-testing approach, where pension increases are based on financial need, would also be a way of managing pension entitlement.
“Although there will be people who fall through the cracks, it seems like the fairest way to ensure that those who need support will receive it.”
The Chancellor is expected to announce that the state pension will rise in line with regular wages at 7.8 percent, rather than the 8.5 percent surge in total pay when bonuses are taken into account.
Official data published last month showed inflation in September held steady at 6.7percent, which is less than the 8.5 percent growth in average pay in the three months to August.
The CCO of emagine Consulting explained that this increase isn’t generous and it’s still unlikely that people can live on this comfortably.
But considering the total state pension expenditure in 2023/24 will be £124.4 billion, it wouldn’t be sustainable to increase it more.
The Chancellor and Mel Stride, the Work and Pensions Secretary, are under pressure over the triple lock because over successive years – especially amid high inflation and wage growth – it has been seen by some as too expensive.
If the state pension does rise by 7.8percent, instead of total pay as the basis for the triple lock, the basic pension will go up by around £837 next year, not the £902 which would be expected if bonuses were included.
