AJ Bell press comment – 15 November 2022
- Raising state pension income in line with inflation backed by 68% of UK adults
- Survey of 4,000 shows all age groups favour maintaining the triple-lock despite surging inflation
- Most younger people support inflation-matched increase, although more than a quarter favour link to wages
- Government under pressure to confirm commitment to manifesto pledge as Chancellor prepares Autumn Statement
More than two-thirds of UK adults support an inflation-matching increase in the state pension next year, new data gathered by Opinium for AJ Bell shows*.
Asked if they backed increasing the state pension in line with wage growth, inflation, or not at all, the overwhelming majority (86%) felt the state pension should increase next year.
Most (68%) said they backed an inflation-linked increase, while a further 18% said it should be aligned to wage growth.
Just 3% feel it shouldn’t go up at all next year and a further 11% say they aren’t sure.
Although support for an inflation-matched increase was strongest among older people, in every age group the majority of people backed maintaining the triple-lock by increasing the state pension in line with inflation.
Source: AJ Bell/Opinium
In its 2019 manifesto the Conservative party committed to maintaining the triple-lock, which guarantees the state pension will increase each year in line with the higher of inflation or wage growth, or a minimum 2.5% if both are below that level.
During her brief spell as Prime Minister Liz Truss pledged to uphold that commitment. However, that has since been cast into doubt as Rishi Sunak and Chancellor Jeremy Hunt weigh up options to balance public finances.
Increasing the state pension in line with inflation next year would see it rise by more than 10% to over £10,000 a year for the first time (see below for further detail).
Breaking the triple-lock commitment would likely mean the state pension would only increase by around 5% in line with wages instead, saving the government an estimated £5bn a year.
Tom Selby, head of retirement policy at AJ Bell, comments:
“While the Chancellor is clearly scrabbling around for potential cost savings ahead of his Autumn Statement this week, attacking the state pension triple-lock would be a seriously high-risk and deeply unpopular move.
“Unsurprisingly, those over the age of 55 are the most likely to back an inflation-linked boost to the state pension next year, with over 8 in 10 saying the Government should stick to its manifesto pledge.
“Support wanes somewhat when you ask younger people, but even then inflation protection remains by far the most popular option, backed by over half (52%) of those aged 18-34.
“Of course, ditching the triple-lock and increasing the state pension in line with average earnings would save the Exchequer a pretty penny - somewhere in the region of £5 billion. And because the state pension would be permanently lower, that saving would be made every year.
“However, given the likely backlash this would generate, particularly among older voters, Jeremy Hunt may want to look elsewhere as he attempts to balance the UK’s books.”
How much could the state pension be worth in 2023?
If the triple-lock is retained and the state pension is uprated by 10.1% next year:
- The full flat-rate state pension, paid to those reaching state pension age from 6 April 2016, will increase from £185.15 per week to £203.85 per week (£10,600.20 per year) from April next year**
- The basic state pension, paid to those who reached state pension age before 6 April 2016, will increase from £141.85 per week to £156.20 per week (£8,122.40 per year)**
However, if earnings growth for the three months to July (5.5%) is used instead:
- The full-flat rate state pension would rise to £195.35 per week - £8.50 per week (or £442 per year) less than a 10.1% inflation-linked increase**
- The basic state pension would rise to £149.65 per week - £6.55 per week (or £340.60 per year) less than a 10.1% inflation-linked increase**
* Data collected by Opinium for AJ Bell between 8-11 Nov 2022. A nationally representative sample of 4,000 UK adults. Q: How much do you think the Government should increase the state pension by next year?
**Rounded to nearest 5p
