Govt rejects House of Lords pension triple-lock vote

Proposals made in the House of Lords to retain the state pension triple-lock have been rejected by the House of Commons.

At the start of November, the House of Lords had voted 220 to 178 in favour of retaining the state pension triple-lock next year.

However, MPs last night voted against the amendment to keep the earnings link in 2022/23. The government is expecting to save £5.4bn in 2022/23 following the decision to increase the state pension by the 3.1% inflation figure, rather than July’s 8.3% earnings growth figure.

The basic state pension is still set to increase by £4.25 a week next year, from £137.60 per week to £141.85 per week, while the flat-rate state pension will rise by £5.55 a week, from £179.60 per week to £185.15 per week.

With inflation expected to hit 4%, however, AJ Bell warned that retirees’ spending power could drop over the next 12 months.

“The decision to row back on a clear manifesto commitment that hits pensioners in the pocket will not have been taken lightly by the Chancellor and the Prime Minister, so it is no surprise to see the government standing firm in the face of opposition from the House of Lords,” commented AJ Bell head of retirement policy, Tom Selby.

“The fact inflation is expected to run hot over the next 12 months has added fuel to the fire, with next year’s planned 3.1% rise in the state pension likely to feel like a real term cut if prices increase by 4% or more.

“The Lords want the government to retain the earnings element of the triple-lock but explore using an alternative measure that flattens the post-lockdown spike we have seen in 2021.”

Selby added: “Even a small extra increase in next year’s planned state pension would leave the Chancellor with a sizeable hole in his spending plans. Every one percentage point increase in the state pension adds around £900m to its cost – money which would likely have to be found from elsewhere.”

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