Pensioners face biggest loss in spending power for nearly 50 years
British pensioners will suffer the greatest loss in spending power in nearly 50 years, with the state pension set to fall by hundreds of pounds in real terms this April.
According to analysis from The Telegraph and wealth manger Quilter, the dramatic surge in inflation and the suspension of the “triple lock” will leave a £388 hole in 12m pensioners’ pockets this year.
The state pension is set to rise by £5.55 a week in April, in line with the 3.1 per cent September figure for inflation.
However, the increase is not enough to keep up with current inflation levels, which are predicted to hit 7.25p per cent.
Someone turning 66 this year would be £9,291 out of pocket by age 85, in real terms.
The state pension was initially on track to rise by 8.8pc due to a freak jump in wage growth caused by furlough and redundancies during the pandemic, but Chancellor Rishi Sunak halted the earnings link for April 2022.
The last time the state pension fell so much in real terms was in 1975, when inflation hit 21.7 per cent and the annual state payment increased by just 14.7 per cent.
This comes as a further blow for pensioners, who are the most vulnerable to rising energy prices this Spring.
The triple lock was a Tory party manifesto pledge, and was designed to ensure the state pension increased each year in line with the broader economy, rising by the highest of earnings, inflation or 2.5 per cent.