Basic state pension could top £10,000 a year if Tories stick to election pledge

2 months ago admin

The basic state pension could top £10,000 a year if the Tories stick to a pledge made at the last election.

As it stands, a jump in wages would trigger a big rise in pensions paid to millions of Britons.

Analysis by City firm AJ Bell says that, based on average earnings rising by 8%, the flat rate state pension would go from £179.60 to almost £194 a week.

That would mean a rise of around £746 a year to just over £10,000, it added.

However, Prime Minister Boris Johnson and Chancellor Rishi Sunak have both refused to rule out scrapping the scheme which they promised to maintain in their election manifesto.

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In it, the Conservatives promised the state pension would increase each year in line with inflation, average wages, or 2.5%, whichever is highest, for the five years of this Parliament.

It came as the Office for National Statistics yesterday (Thurs) confirmed that average weekly earnings increased by 6.6%, or 7.3% including bonuses, in the three months to the end of May.

The state pension triple lock normally uses the average earnings figure from the three months to the end of July and, according to AJ Bell, there is every chance average earnings continue to spike as society emerges from lockdown.

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Tom Selby, senior analyst at AJ Bell, said: “Rishi Sunak faces being caught between the Devil and the deep blue sea on the state pension triple lock.

“While the policy could add billions of pounds to public spending at a time of severe fiscal pressure for the country, unpicking it would break a manifesto commitment.”

The ONS report also revealed a record 356,000 increase in the number of workers on payrolls last month.

Vacancies increased by 241,000 quarter on quarter to 862,000 between April and June – 77,500 above the first three months of 2020 and passing pre-pandemic levels for the first time.

The jobless rate dropped again, to 4.8%, between March and May.

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