State pension is expected to increase from April 2023 and will cost in the region of £11bn if inflation reaches 12 per cent for the year to September 2022, according to research from Canada Life.
The research has revealed a generational divide on the Triple Lock, the mechanism which commits to increasing the state pension by the highest of inflation, earnings or 2.5 per cent. This will result in a record new state pension provision of more than £10,000 per year for those qualifying for the full amount, with inflation already at 10.1 per cent and expected to rise in the autumn.
But not all pensioners who are now collecting the state pension will get a state pension of more than £10,000. Approximately 25 per cent of all pensioners receiving state pension benefits currently receive weekly payments that are less than the full new state pension of £185.15.
More than half of adults or 55 per cent think the Triple Lock should remain in place. Support for the policy rises dramatically among older generations, with 78 per cent of people over 55 agreeing. This decreases to just 33 per cent of people ages 18 to 34.
While a fifth or 18 per cent believe the government should switch back to a “Double Lock” and raise the state pension by 2.5 per cent or the increase in earnings, whichever is larger. Only 9 per cent of those over the age of 55 share this sentiment, compared to 26 per cent of those between the ages of 18 and 34 and 21 per cent of those between the ages of 35 and 54.
Canada Life technical director Andrew Tully says: “This is an economically challenging time and it is especially difficult for many pensioners who rely on fixed incomes. In recognition of this cost of living challenge, more than half of all UK adults support the continuation of the Triple Lock, even when it’s set to increase the state pension by more than 10 per cent.
“When we analyse the data we can see a difference of opinion between the generations. Unsurprisingly perhaps, the vast majority of over 55’s support the triple lock, but less than a third of under 35’s are in favour of the mechanism.
“While this largest ever increase to the State Pension will be an added strain on the public purse it’s clear there would be a significant political challenge if our new Prime Minister was to suggest watering it down.”
