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

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

Treasury calculations suggest that the full state pension could rise in line with average earnings due to the April implementation of the triple lock, which ensures that pensions increase by the highest of September’s inflation, wage growth, or 2.5%.

The projected changes could see the full state pension reach around £12,000 in the 2025/26 tax year, following a £900 increase in 2023. Retirees who began claiming their pension before 2016, who may qualify for the secondary state pension under the old system, are expected to see a £300 annual increase, taking their pensions to £9,000 in 2025/26.

The anticipated pension hike follows backlash against Labour’s policy to restrict the winter fuel allowance to pensioners receiving pension credits. Critics argue that the move effectively uses pensioners as a “cash cow.”

Mel Stride, the Shadow Work and Pensions Secretary and a candidate for the Conservative leadership, condemned the policy, stating: “Labour repeatedly misled voters at the election, saying they had no plans to cut Winter Fuel Payments, as well as matching the Conservative pledge to protect the triple lock. This was not an either-or. Now they are trying to use the triple lock as an excuse for going back on their word.”

Dame Harriett Baldwin, a Tory MP and former chair of the Treasury Select Committee, added: “This is of no help to a frail 90-year-old on an income of £13,000 facing a 10% rise in their heating bills this winter. Labour have made a chilling political choice to take from those with the weakest shoulders to pay their union paymasters.”

With inflation currently at 2%, the state pension is expected to be raised in line with average earnings, with final figures due to be released next week. The decision on the exact pension increase will be made by Liz Kendall, the Pensions Minister, ahead of the October Budget.

The triple lock policy, designed to safeguard pensioners’ income against rising prices in retirement, will remain in place until the end of the current parliament, according to the Chancellor. The Treasury reaffirmed its commitment to the policy, stating: “We’re committed to protecting the triple lock which will boost over 12 million pensioners’ incomes by hundreds of pounds next year.”

The announcement comes as pensioners face rising living costs, particularly in energy, with many voicing concerns about the affordability of heating this winter. As the government navigates its approach to pension and welfare policies, the debate continues over the best ways to support the nation’s retirees in an economically challenging environment.

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