17 Nov 2020

Could Pensioners receive an historic income increase?

The Triple-Lock Guarantee currently promises that basic state pension payments will increase each year at the higher of inflation, wages or 2.5%.

With inflation as measured by CPI being just 0.6% in the second quarter of 2020 and forecast as being up to 2% by the final quarter of 2021, it would be likely that the 2.5% minimum would apply…if it hadn’t been for the bashing the current economy is experiencing.

With expected earnings dropping dramatically due to Covid-19 and the lockdown measures imposed, once we get out of this situation and the economy gets back on track, earnings are forecast to rise by 18.3% in 2021.

The basic state pension currently costs the UK government just over £100 billion – an 18% rise means an expected rise in costs of £18 billion, significantly higher than any government could have anticipated.

The question now is IF wage costs do go up so significantly, will the Government honour their pledge?