State pension payments are guaranteed to increase every year under triple lock rules. These rules mean payments will rise by the highest of 2.5 percent, inflation rates as measured by the Consumer Price Index (CPI) or averaged earnings.
Triple lock rules have been called into question many times over the years as the costs of maintaining yearly increases increased.
This was exemplified recently as the Office for Budget Responsibility (OBR) released its latest fiscal risks report for July 2021.
The OBR detailed, as a result of the economic impacts of coronavirus, average earnings could rise to dramatic levels in 2022.
The report detailed: “Where unusual pandemic-related fluctuations in earnings growth have seen it rise to 5.6 percent in the three months to April 2021, from where it is almost certain to rise further in the three months before the uprating is calculated.
Despite speculation the pledge would be weakened by rising costs, the Cabinet minister said the triple lock guarantee for pensioners is “safe.”
The Business Secretary said he believed the Government should keep to the promise made in the Tory election manifesto to retain the measure.
This comes as the OBR forecasted the state’s pensions bill could rise by an extra £3billion and the Chancellor of the Exchequer acknowledged cost fears were “completely legitimate”.
Mr Sunak recently said any decision made on the triple lock would be fair for “pensioners and for taxpayers”, a view echoed by Boris Johnson.
Despite this, Mr Kwarteng eased tensions today on LBC.
Mr Kwarteng said: “I think it is safe. I mean, I’ve always been of the view that we should stick to the words in the manifesto.
“Of course, things have happened, like Covid. Like the fact that we spent £350billion in one year to support the economy. And I think any government, any group of politicians or civil servants will debate how we can raise the money.
“But as far as I am concerned, the triple lock is still here.”
For the new state pension, the current full payment is £179.60 per week, which requires at least 35 years of National Insurance contributions to receive – although some in certain circumstances may receive a different sum.
Should this increase by eight percent, state pensioners will see their payments rise to around £193.96.
However it should be noted all state pensioners will see their payments rise via the triple lock, regardless of how much they actually get – provided they live in eligible countries to receive the uprated state pension.
The Government’s website has several free-to-use tools available which will allow users to see when they’ll qualify for a state pension, what they’ll get and how they could potentially increase it.