Rishi Sunak’s Inflation-busting rises to pensions and benefits will cost taxpayers around £15billion, experts warn
- Inflation hit a 40-year high of nine percent this month as energy bills soar
- 28million households will get a £400 discount on their energy bills this winter
- 8.3million families on benefits will get £650, pensioners will get £300 in winter
- The Bank of England predicted a ‘sharp economic slowdown’ and ‘bumpy time’
Inflation-busting rises to pensions and benefits next year will cost taxpayers around £15billion, experts warned yesterday.
Older people are in line for a bumper state allowance after Rishi Sunak promised to bring back the triple lock, which protects increases, after it was suspended this year.
On Thursday the Chancellor announced benefit recipients will also receive higher payments next year.
This is because the benefit and pension rates from April next year will be linked to the inflation rate in September this year, when it is expected to hit 10 per cent.
It will then fall in 2023, meaning that when the pension and benefit rises are introduced they will be higher than the rate of inflation.
The Resolution Foundation think-tank yesterday welcomed the decision to boost benefit and state allowances, but revealed it will come with a massive price tag.
It said: ‘On current forecasts, this means that most benefits and the state pension are set for an increase of around 9.5 per cent, the largest nominal increase since 1991, and at an expected cost of around £15billion.’
Yesterday Chancellor Rishi Sunak indicated he could not rule out the need for further handouts next year if energy and food prices stay high
The triple lock – a Tory manifesto commitment – ensures that the state pension will rise each year in line with average wage growth, inflation or by 2.5 per cent – whichever is highest.
Last September the Government confirmed it would suspend the triple lock for one year, following concerns that a post-pandemic rise in average earnings would result in pensions increasing by 8 per cent.
Earnings soared throughout 2021 after falling the year before during the Covid lockdowns.
The suspension was introduced despite Boris Johnson promising in his 2019 election manifesto to maintain the triple lock formula.
Bank of England Governor Andrew Bailey’s warning of ‘apocalyptic’ food price rises amid soaring inflation are ‘bang on’, the president of the National Farmers’ Union has said.
Minette Batters told Hay Festival in Hay-on-Wye, Wales, that Britain faced a ‘perfect storm’ of factors and that the war between Ukraine and Russia, which together produce 30 per cent of global wheat exports, was ‘a game-changer’.
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