State pension set to rise by £400 amid criticism of winter fuel allowance cuts

The UK government is set to increase state pensions by more than £400 a year, following criticism of Chancellor Rachel Reeves’ decision to means-test the winter fuel allowance.

The Treasury calculates that the full state pension could rise in line with average earnings due to the implementation of the triple lock in April, which ensures pensions rise by the higher of September inflation, or wage growth, or 2.5%.

The expected changes could see the full state pension reach around £12,000 in the 2025/26 tax year, following a £900 increase in 2023. Pensioners who started claiming their pension before 2016, and who may have been eligible for the secondary state pension under the old system, are expected to see an annual increase of £300, taking their pension to £9,000 in 2025/26.

The expected increase in pensions comes in the wake of a backlash against Labour’s policy to restrict winter fuel allowance to pensioners who receive pension credits. Critics claim the move effectively uses pensioners as a “cash cow”.

The policy was condemned by Mel Stride, the shadow work and pensions secretary and Tory leadership candidate, who said: “Labour misled voters time and again at the election, claiming they had no plans to cut winter fuel payments, as well as aligning with the Tories’ pledge to protect the triple lock. This was not an either/or. Now they are trying to use the triple lock as an excuse to go back on their word.”

“This does not help a vulnerable 90-year-old man living on £13,000 and facing a 10% increase in heating bills this winter,” added Harriet Baldwin, Tory MP and former chair of the Treasury Select Committee. “Labour has made a terrible political choice by taking money from those with the weakest shoulders to pay their union salaries.”

With inflation currently at 2%, the state pension is expected to rise in line with average earnings, with final figures due next week. Pensions minister Liz Kendall will decide on the exact increase before the October budget.

The triple lock policy, designed to protect pensioners’ incomes from rising prices in retirement, will remain in place until the end of the current parliament, according to the chancellor. The Treasury confirmed its commitment to the policy, saying: “We are committed to protecting the triple lock, which will boost the incomes of more than 12 million pensioners by hundreds of pounds next year.”

The announcement comes as pensioners face rising living costs, particularly in energy, with many expressing concerns about being able to afford heating this winter. As the government explores its approach to pensions and welfare policies, debate continues about how best to support the country’s pensioners in a challenging economic environment.

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