‘The triple lock offered pensioners reassurance, this uncertainty is a nightmare’

The pensions triple lock has been the subject of much debate in recent weeks, amid concerns it might not rise in line with inflation due to Government spending pressures.

Earlier this week, former Prime Minister Liz Truss, pledged to maintain this guarantee of rises in pensioner earnings, but Number 10 refused to commit. Now she’s gone, there are fears the triple lock could be in the firing line, and that Truss’ assurances could disappear when the new PM starts.

If pensions rise by earnings from next April – as opposed to inflation – millions of pensioners will be out of pocket. We spoke to one retiree who is very worried about what all this means.

Find out the latest on April’s state pension increase in our guide.

‘I can’t go out to work or ask for a pay rise’

For this financial year, from 6 April 2022 to 5 April 2023, the triple lock guarantee was paused due to skewed earnings growth following the pandemic, with the increase in the state pension being pegged to an inflation rate of 3.1% in the year to September 2021; the figure for the rise in average earnings had been far higher at over 8%.

The government, though, pledged this March to bring back the guarantee in April 2023. Recently, September’s inflation figure was revealed to be 10.1% – a figure that would mark a record increase for pensioners.

But a flurry of policy U-turns in the aftermath of the tax-cutting mini-budget on 23 September – which had raised the spectre of huge government borrowing and led to a sell-off in gilts – has now put April’s increase in jeopardy.

Sheila Correll, who lives in Lincolnshire, is calling on the new PM to keep the triple lock promise.

The 80-year old who lives alone – except for her dog, two cats, and a parrot – had no chance to build a private pension.

As is the case for many older people in the UK, the basic state pension comprises the bulk of Sheila’s income, along with a little extra help via pension credit. In total, she gets just a little over £180 a week. She is used to scrimping and saving to make ends meet.

Sheila said: “I have to pay for everything out of that. I’m on a fixed income and can’t go out to work or ask for a pay rise. I’m well and truly stuck in the system.

“The triple lock had been one of the measures offering a bit of reassurance to older people like me who rely on the state pension. The uncertainty we are now faced with is an absolute nightmare. It’s hard to budget with so many unknowns.”

Sheila says she doesn’t know what to believe anymore.

“There have been so many twists and turns over the Government’s approach to this guarantee, that it’s almost funny. Except it’s not, because this is people’s lives we’re talking about. No-one knows what to believe any more.

The reliance of Sheila and others on the state pension has been heightened this year by soaring inflation in food and drink prices, measured at 14.6% in the year to September 2022, and the sharp hike in energy costs, where the government’s £2,500 cap on bills has been reduced to six months from the original pledge of two years. As a result, she has improvised her own economies.  

“I haven’t been able to afford energy bills for quite some time, so have come up with other ways to stay warm. I’m lucky to be fit and healthy, so I go running with my dog almost every day, and that helps heat my body up.

“Other than that, I wear a lot of layers to keep insulated, I have some really thick blankets, and I get by with a tiny wood-burning stove.”

Sheila lives in a small town which only has a Tesco and a Co-op, so there are no cheaper options, such as Aldi.

“For me it’s all about buying food and making a meal last. I buy off-cuts from the butcher for £5, and those bits will do me for a few days. I look for offers on tinned items, and I make my own butter,” she said.

“I can’t believe people are having to live like this. Many families on benefits are also really struggling right now. Lots are having to make stark choices between eating and heating.

“I can’t afford to go for a cup of coffee. I get my clothes and shoes from charity shops, and I don’t buy any luxuries. I remain as upbeat as I can, but this isn’t a very happy existence.”

Extremely concerned, Sheila says it’s crucial that the state pension rises in line with inflation next year.

“Right now, every little helps. If earnings are used instead, the rise could easily get swallowed up by other price rises. This would be so unfair to pensioners during a cost of living crisis.

“Those in power don’t seem to have a clue what real people are going through. They live in a different world. Right now it feels as though no-one is on our side. The Government needs to do what is right by retirees. If not, even more older people will be at risk of falling into pensioner poverty. The situation is desperate.”

‘The constant flip-flopping over the triple lock has been upsetting and destabilising’

Caroline Abrahams, charity director at Age UK, said pensioners have been left in a situation where they have no certainty over their income. Other experts say it’s left them anxious and fearing the worst.

“Most recently, Liz Truss, the then PM made an unequivocal commitment to the reintroduction of the triple lock, so we sincerely hope that whoever takes over will honour her pledge,” Abrahams said.

“Certainly, to renege on this would be a low blow for older people and would undoubtedly diminish their sense of trust in our political leaders.

“The constant flip-flopping over the triple lock in the last few weeks has been upsetting and destabilising for older individuals, especially for those on low incomes who are already deeply concerned about how they will make ends meet as inflation reduces their purchasing power.

“They need certainty over how much money they can expect to have coming in, and as soon as possible.”

Rebecca O’Connor, head of pensions and savings at interactive investor, added: “There is no political certainty about anything, and the state pension triple lock is no different.

“Concern among older people – particularly those who are completely dependent on the state pension – is justified. Although it should rise in line with inflation of 10.1% in April, that feels a long way off, and a lot could change between now and then.

“Hopefully the policy outlook will improve in the coming months, and as economic pressures subside. But until the clouds clear, it’s going to be an anxious time for pensioners.”

Find out how the triple lock works.