grew by 4.7 per cent<\/a> between May and July and so this figure will likely be used to dictate next year\u2019s rise.<\/p>\nNew FeatureIn ShortQuick Stories. Same trusted journalism.<\/p>\n
This would see the full new state pension go up from \u00a3230.25 to \u00a3241.05 a week, equivalent to an annual increase of \u00a3561.60. Calculations by Quilter suggest this will add \u00a36.3bn to the state pension bill.<\/p>\n
Yet should the lock be changed and rise by inflation \u2013 which currently stands at 3.8 per cent \u2013 it would cost around \u00a35.14bn, which is just over \u00a31bn less. <\/p>\n
Adam Cole, retirement specialist at Quilter, said: \u201cWhile the triple lock has undoubtedly helped protect pensioner incomes, it has become a blunt and costly tool. <\/p>\n
\u201cLabour is now undertaking the second stage of its pension review and the upcoming Budget will see the Chancellor looking for multiple ways to fill the fiscal black hole. Tackling the long-term sustainability of the state pension should be on the agenda, however unpopular that conversation may be.<\/p>\n
\u201cIf not, we risk the thorny issue of the triple lock simply being kicked between governments, despite the fact it is becoming too expensive to ignore.\u201d<\/p>\n
The Chancellor is expected to have to raise taxes in November\u2019s Budget, in order to fill a black hole in the public finances that experts predict could be tens of billions of pounds.<\/p>\n
Though the increase in the state pension is largely already baked into the Government finances \u2013 with its fiscal watchdog forecasting last year that the state pension would have to rise by 4.6 per cent in 2026 \u2013 how much could be saved in tax increases if it instead went up by inflation, saving \u00a31bn?<\/p>\n
The i Paper spoke to experts to find out. <\/p>\n
What tax rises could cover the triple lock cost?<\/p>\n
Th rise in the state pension next year \u201cis akin to an almost 1p rise in the basic rate of income tax,\u201d according to Robert Salter, a partner at accountancy firm Blick Rothenberg.<\/p>\n
He says a 1p rise in the basic rate is estimated at increasing tax revenues by around \u00a37.5bn or so per year.<\/p>\n
But freezing the state pension entirely is unlikely to be something that politicians could countenance.<\/p>\n
So what about the \u00a31bn that would be saved if the state pension were to go up by inflation instead of average earnings?<\/p>\n
Salter suggests that this \u00a31bn gap may be the difference between a rise in fuel duty, and no rise.<\/p>\n
\u201cEnding the \u2018temporary\u2019 5p per litre relief on fuel duty \u2013 which is due to end next year \u2013 and then increasing the fuel duty rate by say a further 2.5p per litre could raise another \u00a31bn or so,\u201d he says.<\/p>\n
\u201cA 1p in the higher (40 per cent) rate of income tax could cover this extra \u00a31bn,\u201d he says.<\/p>\n
\u201cOther options could include increasing some \u2018hidden taxes\u2019 such as insurance premium tax. For example, an increase in insurance premium tax worth 1 per cent could raise say \u00a3600m.\u201d<\/p>\n
Figures from HMRC also indicate that a 1 per cent increase to the personal allowance \u2013 the amount someone can earn without having to pay tax, \u00a312,570 \u2013 is also worth around \u00a31bn to the exchequer.<\/p>\n","protected":false},"excerpt":{"rendered":"The state pension is due to go up by 4.7 per cent in April, adding over \u00a36bn worth…\n","protected":false},"author":2,"featured_media":146392,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4178,4174,4175,2221,8182,56,54,55],"class_list":{"0":"post-146391","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-pensions","11":"tag-personal-finance","12":"tag-personalfinance","13":"tag-state-pension","14":"tag-state-pension-triple-lock","15":"tag-uk","16":"tag-united-kingdom","17":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/146391","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=146391"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/146391\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/146392"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=146391"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=146391"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=146391"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}