Sunak promises pensioners £850 and to restore triple lock next year

The Chancellor pledges financial aid to millions of retirees disproportionately affected by rising costs

PENSIONERS will be given £850 to help with their energy bills, Rishi Sunak announced, as he pledged to bring back the “triple lock” next April. The Chancellor promised to reinstate the annual increase in a move that would mean millions of elderly people receive a £1,000 a year boost to their earnings.

Experts have warned that it, alongside a promise to uprate benefits to match rising prices, could cost £15billion to the taxpayer.

Mr Sunak made the pledge as he unveiled a £21billion cost-of-living rescue package in the Commons that will result in the poorest elderly recipients being given £1,500 this year.

In a speech to MPS, he said retirees were “disproportionately impacted” by rising costs because they cannot boost their earnings and need the heating on for longer.

Mr Sunak unveiled a doubling of the Winter Fuel Payment for more than eight million pensioner households looking ahead to winter, taking it from £300 up to £600.

All homes will receive a £400 grant in the autumn, replacing the £200 rebate announced in February, which would have been paid back through higher future bills. Eight million lowincome families on welfare will also be handed a £650 cost of living payment, with those on disability benefits getting an extra £150.

The package comes on top of £22billion of support already announced by the Chancellor, including a £150 council tax discount for homes in bands A-D.

It means the average pensioner household will receive £850 in total and the poorest ones £1,500, the same amount by which energy bills are rising this year.

Mr Sunak unveiled the new package, which will take his cost of living help to 1.5 per cent of GDP, as a poll revealed that one in five Britons are now struggling to make ends meet.

In a major about-turn, he announced that a third of the cost of the new package will be met by hitting oil and gas producers with a windfall tax on their bumper profits.

Boris Johnson previously opposed the measure, which Labour has championed, arguing it would deter energy firms from investing in the green transition. The 25 per cent levy is expected to raise £5billion over the next year, though companies will be able to reduce their payments by ploughing earnings back into projects.

To sarcastic cheers from the Labour benches, Mr Sunak said: “We should not be ideological about this, we should be pragmatic.

“The oil and gas sector is making extraordinary profits. It is possible to both tax extraordinary profits fairly and incentivise investment.”

He suggested the tax could soon be extended to electricity companies too,

saying officials are “urgently evaluating ... the appropriate steps to take”.

“The high inflation we are experiencing now is causing acute distress for the people of this country. I know they are worried. I know people are struggling,” said Mr Sunak.

“This Government will never stop trying to help people to fix problems where we can to do what is right as we did throughout the pandemic.

“We need to make sure that for those for whom the struggle is too hard and for whom the risks are too great are supported. This Government will not sit idly by while there’s a risk some in our country might be set so far back they might never recover. This is simply unacceptable.”

Mr Sunak said the Government could not ease all the cost of living pain and support must remain “temporary and targeted” so as not to fuel inflation.

Rachel Reeves, the shadow chancellor, accused Mr Sunak of stealing Labour’s policies, adding that: “There can be no doubt who is winning the battle of ideas.” The “triple lock” ensures the state pension rises by whichever is higher out of wage growth, inflation, or 2.5 per cent, and is measured on September’s figures.

It was suspended because at the time pay packets were booming as the economy emerged from the pandemic during a squeeze on labour supply.

Instead of an expected 9 per cent increase, the elderly got only 3.1 per cent more cash when the raise kicked in last month, meaning they will miss out on £550 this year.

Mr Sunak pointed out that inflation this September is projected at 10 per cent, but to fall by the following April, so pensioners will receive a real-terms earnings boost next year.

Recipients of the new state pension would see their weekly payments go up by £18.50 to just over £203, according to Steven Cameron, a pensions expert at Aegon.

“That should give people an enormous sense of reassurance,” the Chancellor told a Q&A session with Martin Lewis, the consumer champion.

“Next year, there’s going to be an enormous easing as all of their incomes go up considerably compared to what the increase in prices is.”

Torsten Bell, chief executive of the Resolution Foundation, said: “The decision to provide one-off payments this year is a good attempt to target those with higher energy bills – although the relative lack of support for larger families stands out.”

Caroline Abrahams, charity director at Age UK, said: “[We are] pleased and relieved that the Government has recognised the extreme risks soaring inflation pose to the health and welfare of pensioners, particularly those on low incomes, and has announced a package of measures today with the aim of mitigating them.

“With prices continuing to go up for everything they buy, life is certainly not going to be easy for many older people over the next few months, but the extra support the Chancellor is bringing forward will make a difference and will protect most from the worst of the unprecedented surge in the cost of living they face.”