News in brief... the triple lock returns

⬤ The Office for Budget Responsibility (OBR) now expects the Treasury to receive £1.7bn of income tax from people over 55 using the flexible withdrawal rules to take money out of their pension savings in the 2021-2022 tax year. That’s a £500m increase on its projection just six months ago, a footnote in last week’s spring statement revealed. The numbers reflect the OBR’s view that very large numbers of people have brought forward plans to cash in their pension as a result of the Covid-19 pandemic, raising fears that some savers could run out of money later on in retirement.

⬤ Pensioners could see the biggest-ever rise in state pensions in April 2023. Last week, the government confirmed that its “triple lock” guarantee will be reinstated. The pledge to raise state pensions by the higher of 2.5%, average wage growth, or inflation (as measured by the consumer price index – CPI) was dropped for the 2022-2023 tax year, with pensioners receiving a 3.1% rise (in line with September’s CPI reading) rather than the wage inflation figure of more than 8%, which was distorted by the pandemic. But with CPI now forecast to be around 7% in autumn, next year’s state pension rise could be worth more than twice as much.

⬤ Cash-strapped older people are being urged to check whether they are eligible for pension credit. The benefit is paid to pensioners whose income falls below a minimum level, but entitlements are not always calculated automatically. Government figures published this month reveal as many as 850,000 households are missing out, with £1.7bn of benefits going unclaimed last year.