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Triple lock under threat as ministers consider cutting £1.45 per week to boost public finances

The future of the state pension triple lock hangs in the balance as Jeremy Hunt considers limiting the size of the increase in pension payments to save nearly £1bn.

Opposition politicians and campaigners for the elderly warned the Government not to tweak the rules of the policy by using a lower calculation of earnings rises than usual.

The state pension will rise more quickly than inflation next year under the triple lock, which indexes its growth rate to average pay growth, inflation or 2.5 per cent – whichever is the highest.

Using the normal rules, it would increase by 8.5 per cent – reaching a level of £221.20 for the full new state pension. But that figure is inflated by a one-off payment given to many public service workers over the summer in a bid to end strike action.

The Chancellor is still considering using a figure for average earnings growth which excludes bonuses, coming in at 7.8 per cent. This would cost pensioners up to £1.45 a week, or £75 a year, while saving around £900m for the Exchequer.

A final decision will be made in the weeks running up to the Autumn Statement on 22 November, after Mr Hunt has seen the detailed forecasts for the public finances produced by the Office for Budget Responsibility.

Wendy Chamberlain, the Liberal Democrats’ spokesperson for work and pensions, said: “To row back on the triple lock would be another in a long list of callous Conservative party broken promises. It gives security to the younger generations that they will have support as they get older, and gives pensioners the money they need in face of spiralling energy and food costs.”

Caroline Abrahams of Age UK added: “From what we hear from older people, most think the Government promised them they would abide by the triple lock and they should stick to it, not try and water down their pledge. The state pension was put in place to ensure older people had sufficient income to cover basic needs in later life, but at the moment too many are struggling to afford a decent standard of living.”

And Morgan Vine from Independent Age said: “The 2.1 million older people living in financial hardship need every penny they can get. Every day, we hear from those who are down to one meal a day or not using their heating. They cannot cut back any further.”

A Downing Street spokesman said: “There is a process which Mel Stride as Pensions Secretary will lead, and that process is still under way.”

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