The state pension is expected to reach over £200 per week in 2024. Chancellor Rishi Sunak’s Spring Statement revealed that little help will be on offer for pensioners when the state pension rises by 3.1% in April 2022, which is less than half the current rate of inflation.
Following this announcement, the Office for Budget Responsibility (OBR), and former pensions minister and partner of Lane Clark & Peacock (LCP), Steve Webb, have stated that based on new calculations UK pensioners are likely to face a “financial rollercoaster” in the near future.
The government has however confirmed that a 2024 state pension “triple lock” is to be expected, and the rate will reflect the surge in inflation. The OBR is forecasting this to be a 7.5% increase, adding over £10 per week to the basic state pension and more than £13 per week to the new state pension. The OBR is now suggesting that by April 2024 the state pension will surpass £200 per week for the first time.
But despite the increases, experts say that pensioners are likely to face the toughest year ahead that they’ve ever ever seen. LCP commented:
“The main help they will receive from the Chancellor is the already-announced £150 off Council Tax bills, but only for those in properties in bands A to D. They will also get £200 off energy bills in the Autumn, but this will have to be repaid over the coming five years.”
Speaking to Professional Adviser, Steve Webb, former pensions minister and partner of LCP, also commented:
“Pensioners are set to face a financial rollercoaster in the coming years with a tough squeeze this year followed by a catch-up next year. The Spring Statement will have been a big disappointment, and some pensioners may find themselves having to apply to their council for hardship funds simply to make ends meet.
But next year should see the biggest ever cash rise in the value of the state pension, as pension rates catch up. The problem is that ‘jam tomorrow’ will not pay bills today.”