Basic state pension to rise by just £1 a day if triple lock is axed

The state pension should rise by 10.1 percent from April if the government implements the triple lock mechanism.That is in line with the September’s inflation figure, and would help protect 12.5million pensioners from today’s rocketing cost of living.It would apply both to the new state pension, paid to those who retired from April 6, 2016, and its predecessor, the old basic state pension.Yet in cash terms, older pensioners get a smaller increase, because the basic state pension has a much lower starting point.As Chancellor Jeremy Hunt searches for another £40 billion worth of spending cuts, the triple lock is in the firing line.The mechanism, introduced in 2010, increases both state pensions each year either by inflation, earnings or 2.5 percent, whichever is highest.The Government has point blank refused to confirm whether it will implement the triple lock, and pensioners now face an anxious wait. Many will be shocked when they see how little the basic state pension could increase (Image: Getty)On November 17, Hunt will stand up to deliver his autumn statement, which is when we are likely to know for sure what will happen to the triple lock.If he increases it by 10.1 percent, it will cost the government an extra £10billion a year.Many believe that he will increase it by the lower earnings figure instead, which stood at 5.5 per cent in September.That would save HM Treasury around £5billion but be a huge blow for every pensioner, and especially those on the basic state pension.Currently, the new state pension pays a maximum of £9,627.80 a year to somebody who has made 35 years of National Insurance (NI) contributions during their working lifetime.A 10.1 percent increase would lift that to £10,600.20. The increase is worth £972.40 a year, or an extra £2.66 a day.If the new state pension rises by 5.5 percent, it would pay £10,157 a year, an increase of £1.45 a day.Either way, it’s not much.READ MORE: Rishi Sunak plays games with triple lock while pensioners struggleThe basic state pension starts from a much lower point, as it currently pays a maximum of just £7,376.20 a year.An inflation-linked increase would lift that to £8,121.20, an increase of £745 a year or £2.04 a day. Yet if increases by earnings instead it will rise to £7,781.89, giving basic state pensioners just £405.69 more.That’s just £1.11 extra a day.It’s nowhere near enough as the cost of food, fuel and everything else goes through the roof.Many will get an even smaller increase as they did not make the full amount of NI contributions. Men who retired before 2010 had to contribute for a staggering 44 years, or 39 years for women.That fell to 30 years for the final six years of the old scheme.DON’T MISS:’Rishi could run out of luck if he dares to ditch triple lock’ [INSIGHT]State pension age warning as Government may change policy again [GUIDE]Free bus pass in jeopardy due to rising state pension age [WARNING] For some the state pension increase will be counted in pennies (Image: Getty)Many who retired on the basic state pension feel robbed by the two-tier system.In practice, many will get it topped up by additional state pension, say, through the state-earnings related pension scheme (Serps) or state second pension (S2P).Yet many women do not get an additional state pension, because they gave up work to raise a family.They face a real struggle, especially if widowed or divorced.They will get much less £1.11 a day if Sunak and Hunt axe the triple lock, and in some cases even if they don’t.While they can claim means-tested state pension top up pension credit, many fail to do so.Another disadvantage is that pension credit does not benefit from the triple lock and usually only increases by earnings.Next year will be tough for many, but the poorest, oldest pensioners will suffer more than most.