Increase the basic state pensions by £500 a year as an emergency measure

Both old and new state pensions to be increased by £500 pa as an emergency measure to compensate for the suspension of the triple lock and to help pensioners cope with the cost-of-living crisis, including increases in energy and food prices. The payment to be consolidated into future pension rates.

The suspension of the triple lock was agreed by Parliament before the full impact of the energy crisis on prices was known. Silver Voices estimates that the 3.1% increase in pensions due in April will be about half the prevailing rate of inflation then. A lump sum increase of £500 pa would cover the losses to pensioners caused by the triple lock suspension and help ensure millions of older people don't have to choose between eating and heating this winter.

The Government has no plans to increase the State Pension by £500 a year as an emergency measure. We have never paid our pensioners more. This year, we will spend over £129 billion on the State Pension and benefits for pensioners in Great Britain. From April, the full yearly amount of the basic State Pension will be around £720 more in 2022/23 than if it had been up-rated by prices since 2010. That’s a rise of over £2,300 in cash terms.

In 2020/21, we introduced Primary legislation to increase State Pensions by 2.5 percent, higher than both inflation at 0.5 per cent and falling wages. The pandemic had caused the unusual fall in wages and meant if we had not taken that action, State Pensions would have been frozen for 2021/22. We also made a temporary change to the law to ensure the basic and new State Pensions increase by the higher of price inflation or 2.5 per cent for 2022/23. This means in April State Pensions will rise by 3.1 percent. Taken together, this means that over the last two years, we have delivered an increase of more than 5.6% in the basic and new State Pension.

The suspension of the Triple Lock for one year is a temporary response to exceptional circumstances caused by the pandemic. This approach is fair to both pensioners and younger taxpayers. The Government remains committed to the Triple Lock for the remainder of this Parliament.

Pension Credit can provide further benefits and we want to ensure people receive all the support they are entitled to. Around 1.4 million eligible pensioners across Great Britain already receive some £5 billion in Pension Credit, which tops up their retirement income and is a passport to other financial help such as support with housing costs, council tax, heating bills and a free TV licence for those over 75.