Pensioners are to get a boost of almost £18 per week to their state handouts in the Autumn Statement after Jeremy Hunt decided to keep the ‘triple lock’ in place.
The Chancellor confirmed an 8.5 per cent increase in the state pension, increasing the value by £17.33 a week – or more than £900 a year.
It is among a number of taxpayer-funded payouts that will be uplifted by the September rate of inflation, which also includes benefits.
He told MPs today it was ‘one of the largest-ever cash increases of the state pension’, adding: ‘A Conservative government will always back our pensioners’.
The triple lock increases pensions each April by whatever is highest out of average earnings rises, inflation or 2.5 per cent.
But its retention has attracted criticism at a time of high inflation, with critics arguing pensioners are already better off than working-age people and the money could be better used elsewhere.
The increase is expected to cost the Treasury £2billion per year.
But Mr Hunt said: ‘The triple lock has helped lift 250,000 older people out of poverty since it was instituted in 2011 and been a lifeline for many during a period of high inflation.
‘There have been reports that we would uprate it by a lower amount to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for one million pensioners whose only income is from the state.
‘So instead, today we honour our commitment to the triple lock in full. From April 2024, we will increase the full new state pension by 8.5 per cent to £221.20 a week, worth up to £900 more a year. That is one of the largest ever cash increases to the state pension – showing a Conservative government will always back our pensioners.’
He added: ‘Including today’s measures, our total commitment to easing cost of living pressures has risen to £104 billion.
‘That includes paying around half the cost of the average energy bill since last October and amounts to an average of £3,700 per household.
‘We are able to do that only because we reduced the deficit by 80 per cent ahead of the pandemic, which the party opposite might reflect on, having opposed us every step of the way.’
The Treasury has already signalled a series of measures that will be in the speech, including a £320 million plan to unlock pension fund investment for technology and science schemes.
Dubbed the Mansion House Reforms and announced by the Chancellor earlier this year, leading pensions firms agreed to put 5 per cent of their investments into early-stage businesses in the fintech, life sciences, biotech and clean technology sectors by 2030.
The move was pitched as a way to help increase the retirement savings of a typical earner who starts saving at 18, by 12 per cent over their career, or more than £1,000 more a year once they stop working.
The Government estimated that the reforms could release £50 billion of scale-up investment if the rest of the industry follows suit.
On Tuesday the Treasury said that £320 million would be used to help unlock that investment, with £250 million committed to two successful bidders under the long-term investment for technology and science initiative.
Mr Hunt will vow to ‘get Britain growing’ today as he makes the Tories’ pitch to voters by cutting taxes and cracking down on the workshy.
In a crucial Autumn Statement, the Chancellor will draw battle lines for a long election struggle by starting to reduce the eye-watering burden on businesses and families.
He is expected to cut National Insurance in a move that will benefit 28million Brits, as well as making permanent a £10billion-a-year tax break for firms.
Benefits will also be increased by 6.7 per cent after Mr Hunt backed away from using a lower uprating figure – but up to two million disability claimants will face tougher rules on finding work where possible.
Duties on beer, wine and spirits, and pubs and bars are widely predicted to be frozen, while bars could have their 75 per cent business rates holiday extended.
The Cabinet is meeting this morning to be briefed on the contents of the package, with Mr Hunt handed some wriggle room by bigger-than-anticipated tax revenues and easing inflation.
However, the fiscal position remains incredibly tight, with the Office for Budget Responsibility (OBR) watchdog likely to downgrade forecasts for economic growth and the Bank of England warning that the inflation threat has not disappeared.