Pensioners face a price squeeze which will override gains from a record state pension increase and put them in more peril, experts warn. This week, under the triple-lock guarantee, the state pension will rise by 10.1 percent to £10,600 – adding nearly £19 a week to the full pension and an extra £972 a year. But analysis of price rises found it will not be enough to cover the bills.
Soaring inflation has pushed food up by a typical £837 a year while rising energy costs have added £1,223 to the average gas and electricity bill.
Andrew Tully, of pension specialists Canada Life, which did the research, said: “Pensioners will be feeling apprehensive and worried – despite the triple lock increase.
“Even a household where a couple both get the full state pension will see the rise wiped out by the price rises.
“It’s also worth remembering many pensioners don’t receive the full state pension and those who claimed their state pension before April 2016 under the old system will receive less – around an extra £14 week, or £746 per year.
“This is a difficult time for many but especially those households on fixed-incomes, typically pensioners.”
Independent Age, which supports older people, said: “We’re seeing more and more calls every day to our helpline from people who are desperate.
“They really don’t have any idea how they’re going to pay their bills.
“They are talking to us about things like switching their fridge off overnight to save electricity. We’re seriously worried. It’s going to be devastating for a lot of people.” The full “new” state pension is paid to people who reached retirement age after April 2016.
People who reached retirement age before then get a basic state pension, which is topped up based on lifetime National Insurance contributions.
Under the triple-lock, both the basic and full state pensions increase by the highest rate of inflation, wage growth or 2.5 percent.
The 10.1 percent rise this week was set by the rate of inflation last September after a successful campaign by The Daily Express to persuade the Government to keep the triple lock policy in place.
Catherine Foot, director of the longevity thinktank Phoenix Insights, said: “This month’s increase in the state pension is the highest since the introduction of the triple lock.
“But it will be of limited consolation to the poorest pensioners as inflation remains stubbornly high.
“Many low-income pensioners with scarce additional resources to draw upon have struggled to keep pace with the cost of living following the below-inflation rise of 3.1 percent last April.”
