State pension triple foreclosure removed - here’s how much you’ll lose

The government has broken its ‘triple lockdown’ promise, denying millions of retirees a record £ 822 increase in the state pension.

Therese Coffey, Secretary of State for Work and Pensions, has announced a temporary suspension of the Conservative manifesto’s long-standing engagement in a scramble to avoid a £ 5.4 billion increase in the annual pension bill.

The mechanism, which ensures that the state pension increases by the highest level of inflation, wage growth or 2.5%, will no longer be tied to earnings for the 2022 reset.

The state pension will increase by 2.5% or inflation next April instead of the 8.8% increase that was due under the triple lockdown. A sharp jump in wage growth caused by holidays and layoffs during the pandemic made the pledge unaffordable at a difficult time for public finances.

However, the Prime Minister dealt retirees a heavy blow, ignoring income data released by the Office for National Statistics which suggested the government is using a watered-down and more realistic income figure of 3.5 pc.

If the change stays in place indefinitely, Britons will be worse off by £ 14,000 by the time they turn 85, assuming the state pension grows 2.5% per year instead of income. They would get an additional raise of £ 233 per year instead of £ 822. Retirees lost an additional £ 100 in the government’s decision to opt for a 2.5% lower increase compared to the ONS’s 3.5%.