Liz Truss grilled on government's plan to ease inflation pressures
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Inflation this week hit a 40-year-high soaring to nine percent, impacting the pockets of millions of Britons. Pensioners, many of whom rely on the state pension, are thought to be one of the worst affected groups.
They have already experienced a real terms cut due to the temporary freeze of the triple lock mechanism.
The triple lock was predicted to deliver a bumper increase of eight percent this year if it had gone ahead.
However, ministers decided to scrap the policy for the year due to the warped earnings data and perceived lack of affordability.
Instead, the state pension rose in April by 3.1 percent – inflation as recorded in September 2021.
It is now estimated someone turning 66 this year would be over £13,000 out of pocket by age 85 as a result of lower increases, the Telegraph reports.
Spending power for pensioners has taken a nose dive, with many concerned about their financial stability going forward.
This has been compounded by rapidly increasing energy bills, which have surged in recent months.
Analysts have suggested the war in Ukraine could drive average bills to £3,000 per year, according to End Fuel Poverty.
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The charity has warned 8.5 million UK households could be left in fuel poverty as a result.
Inflation woes have not yet reached their end.
The Bank of England is now predicting inflation to reach double digits at its peak later this year.
It will create short term financial tightening for pensioners and other Britons alike.
However, in the long term, this could be more beneficial for pensioners.
This is because the September 2022 inflationary measure is likely to be used to calculate next year’s state pension increases.
It could mean a more substantial rise is available to older people next year.
Steven Cameron, Pensions Director at Aegon, said: “This could grant state pensioners a bumper increase under the triple lock next April.
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“But this is only after what will be a very difficult year and a long, cold winter for many.
“It is still unclear whether the Chancellor will provide temporary or targeted support for those in greatest need.
“In the meantime many individuals will be looking to cut back on ‘discretionary’ purchases where they can.”
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