JEFF PRESTRIDGE: Expect great news on the state pension this week – here’s the key detail you must look out for

There should be good news this week about the state pension which will delight those in receipt of it, especially pensioners who are struggling to cope with the cost of living crisis.

It will make a pleasant change (the good news, that is) given the concerted campaign by many to convince the Government that the triple lock – which governs the annual state pension increase pensioners get – is unaffordable.

It should be binned, they argue, in the nation’s best financial interests. What utter garbage.

But these voices from the Left might get their way given the mess Labour has made of running the economy – and its loathing of the elderly.

But as many of you have told me in recent days, in response to my thoughts last week on the state pension, there are other areas of Government spending that should be tackled before pensioners are hung out to dry.

Absolutely, although Prime Minister Andy Burnham vehemently disagrees, judging by his worrying statement a few days ago in the House of Commons that social security (code for welfare benefits) is a greater national priority than keeping our country safe from the threats posed by the emboldened axis of evil.

Oh deary me, as my late mother would have said.

Back to the good news before I give up the will to live. It will come on Tuesday when the Office for National Statistics (ONS) releases its latest earnings data. 

These numbers usually pass me by, but they are of critical importance to pensioners because they will be used in the earnings element of the triple lock to decide what state pension increase will come their way in April when the new tax year starts.

As most of you know, the triple lock ensures pensioners receive an increase based on the higher of inflation (currently below 3 per cent), earnings, or 2.5 per cent.

And it now seems Tuesday’s ONS earnings data will result in an April pension increase of around 4.1 per cent. For those in receipt of the full state pension, it will mean their weekly payment rising from £241.30 to around £251.20.

Pensioners who retired before April 2016 on the old state pension will see their maximum weekly payments rise from £184.90 to about £192.50. A two-tier system, yes. But no government, especially a Labour one, is going to tackle that thorny issue.

Ahead of Tuesday’s ONS data, various organisations have opined on the need to do away with the triple lock.

Seven days ago, the British Chambers of Commerce called for it to be replaced by an annual increase linked to inflation, with the resulting savings funding a cut to National Insurance (NI) bills for the under-25s.

Then the Institute for Fiscal Studies weighed in (yet again) stating that at some point a government will have to move away from the triple lock ‘towards a more predictable and less costly way of uprating the state pension’.

It reiterated its call for a system along the lines of that in Australia where the state pension rises in line with average earnings over the long term but with the scope to increase it more sharply if inflation starts to spike.

I am sure other think-tanks will have their say on the triple lock in coming days as the rise in next year’s state pension is confirmed.

I think it’s only right we are having a debate about the triple lock’s future. Indeed, I quite enjoyed Radio 4’s ‘Today debate’ on the lock a few days ago with two panellists arguing for – and two against – its continuation.

It was a measured debate, expertly overseen by Today presenter Nick Robinson who, for once, refrained from interrupting the speakers. There was no bias and no one ‘won’ the argument, but the fact that Radio 4 devoted 40 minutes of air time to the triple lock highlights how precarious its future is.

I’m in the John Redwood camp on the triple lock. The former Conservative minister, who was my local MP until two years ago, says Rachel Reeves’ decision in April last year to increase NI costs on employers might have damaged UK businesses but it has improved the financial health of the fund into which NI is paid – and from which state pensions are drawn.

So much so, he says, that the fund is not only able to afford the state pensions plus any increases triggered by the triple lock but also provide it with a ‘large and growing cash reserve’.

In summary, the NI fund is in rude financial health and the triple lock affordable.

Maybe the Chancellor will have something to say on this in his Budget late next month.