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Triple lock freeze to cost pensioners £500 a year, says TUC

·Finance Reporter, Yahoo Finance UK
·2-min read
Triple lock freeze to cost pensioners £500 a year, says TUC
Chancellor Rishi Sunak is being urged to reverse the decision to abandon the pension triple lock. Photo: Justin Tallis/Reuters

The government’s decision to freeze the state pension triple lock will cost pensioners almost £500 a year, trade unions have warned.

The Trades Union Congress (TUC) is urging the government to reverse its move to abandon the pensions triple lock as UK households face the biggest income squeeze since the 1970s.

The TUC said April’s 3.1% increase, compared to the 8.3% under the triple lock formula, will cost someone on a full new state pension £487 a year and someone on the full basic state pension £373 a year.

The union body said pensioners will be forced into poverty by rising fuel and food costs unless the government reverses its decision on the triple lock.

Read more: UK workers face £20.5bn hike in tax rises as inflation soars

TUC general secretary Frances O’Grady said: “The UK has one of the least generous state pensions in the developed world. The triple lock was introduced to close this gap and lift pensioners out of poverty.

"Abandoning it in the middle of a cost-of-living crisis will leave thousands of pensioners struggling to keep their heads above water. With households across Britain pushed to the brink by skyrocketing bills, this is the worst time for the government to be cutting pensioners’ incomes.

“Reversing the decision to suspend the triple lock is one step it must take, but ministers must also protect households from being forced into poverty by rising bills.”

Pensioners are particularly vulnerable to price hikes as they spend a higher percentage of their income on food and fuel.

Read more: UK basic pay falls behind inflation at fastest rate in eight years

The TUC said the chancellor’s spring statement next week was the government’s last chance to reverse its “broken promise” on the triple lock.

The union body is also calling on the chancellor to introduce a windfall tax on energy companies, and to use those funds to provide energy grants that “at least” match future rises in the energy price cap for vulnerable households. It also wants Rishi Sunak to replace the “inadequate loans” of £200 proposed by government.

A recent TUC analysis pointed that record-high energy prices could wipe out the entire value of pay rises this year.

The union body said pensioners are facing a significant real terms fall in income this year.

Watch: Is a UK state pension enough to survive on in retirement?