Pensioners could be in line for an inflation-linked rise in Thursday's autumn statement after Prime Minister Rishi Sunak said the generation was “at the forefront of my mind”.
He and Chancellor Jeremy Hunt are considering up to £60 billion ($70.51bn) in tax rises and spending cuts in the autumn budget.
But Mr Sunak hinted they could avoid real-terms cuts on state pensions by increasing them in line with soaring inflation in a sign the triple lock could be protected.
Members of his Cabinet, including Michael Gove, have warned against going back on the 2019 commitment of maintaining the pensions “triple lock” as inflation rises past 10 per cent.
Despite the parlous state of the nation’s finances, Mr Hunt and Mr Sunak are expected to increase pensions and benefits in line with rising prices.
The Times also reported Mr Sunak would announce a significant increase in the national living wage — from £9.50 an hour to about £10.40 — and give payments to assist with the high cost of living to about eight million households on means-tested benefits.
Rishi Sunak through the years - in pictures
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British Prime Minister Rishi Sunak announces July 4 as the date for the 2024 general election at No 10 Downing Street. Here, The National looks back at his political career. Getty Images -
Mr Sunak during local election campaigning in Teesside in May 2024. Getty Images -
Mr Sunak presents cupcakes to journalists on board a plane on the way to Warsaw in April 2024. Getty Images -
Mr Sunak during a press conference in Downing Street in January after the Safety of Rwanda Bill passed its third reading in the House of Commons. Getty Images -
Being applauded after his speech at the Conservative Party conference in October 2023. Getty Images -
Looking pensive alongside then-home secretary Suella Braverman at No 10 in October 2023. She didn't last much longer in the cabinet. Getty Images -
Mr Sunak sits in an old Special Branch police vehicle which was used to transport former prime minister Margaret Thatcher, in July 2023. Getty Images -
On board Border Agency cutter HMC Seeker during a visit to Dover in June 2023. Getty Images -
Mr Sunak alongside European Commission President Ursula von der Leyen, Canada's Prime Minister Justin Trudeau, US President Joe Biden, French President Emmanuel Macron and German Chancellor Olaf Scholz during the G7 Summit in May 2023. Getty Images -
Mr Sunak and his wife Akshata Murty arriving in Japan ahead of the G7 Summit in May 2023. Getty Images -
Mr Sunak and Chancellor Jeremy Hunt sending a message at Accrington Market Hall in January 2023. Getty Images -
Mr Sunak and Ukrainian President Volodymyr Zelenskyy meet in Ukraine's capital Kyiv in November 2022. Getty Images -
King Charles III welcomes Mr Sunak during an audience at Buckingham Palace, where he invited the newly elected leader of the Conservative Party to become Prime Minister and form a new government in October 2022. Getty Images -
Mr Sunak makes a statement outside No 10 in October 2022 after taking office. Getty Images -
Mr Sunak arrives inside Number 10 in October 2022. Photo: Simon Walker/ No 10 Downing Street -
Greeted by colleagues at Conservative Party HQ after having been announced winner of the leadership contest in October 2022. Getty Images -
Mr Sunak at Westminster Hall in London following the death of Queen Elizabeth II in September 2022. PA -
Mr Sunak visits his family's old business, Bassett Pharmacy, on the campaign trail in August 2022. Getty Images -
Mr Sunak looks at an NLAW anti-tank launcher during a visit to the Thales Defence System plant in Belfast in August 2022. Getty Images -
At a hustings event in Exeter in August 2022. Getty Images -
Celebrates England's first goal as he watches the Women's Euro 2022 final in Salisbury in July 2022. Getty Images -
Mr Sunak and Ms Truss take part in the BBC Leadership debate at Victoria Hall, Hanley, in July 2022. Getty Images -
With daughters Krisna and Anoushka and wife Akshata Murthy in July 2022. Getty Images -
Opening the Great Ayton Village Fete during the queen’s Platinum Jubilee celebrations in June 2022. Getty Images -
Mr Sunak and Ms Murthy speak to then-Prince Charles at a British Asian Trust event in February 2022. Getty Images -
Mr Sunak arrives at COP26 in Glasgow in November 2021 when he was chancellor. Getty Images -
Holding the budget box as he departs 11 Downing Street to deliver his Autumn Budget in October 2021. Getty Images -
At a press conference on the 2021 Budget in London in March 2021. Getty Images -
With former prime minister Boris Johnson during a visit to PD Ports on the River Tees in March 2021. Getty Images -
Mr Sunak poses with the budget box at 11 Downing Street in March 2021. Getty Images -
Meeting staff back at work after being furloughed at Hamleys toy shop in London, December 2020. Photo: HM Treasury -
Mr Sunak visits the Imperial Clinic Research Facility at Hammersmith Hospital, London, in November 2020. Getty Images -
Lighting a candle for Diwali on Downing Street, November 2020. Getty Images -
Working on a speech in his flat above 11 Downing Street in November 2020. Photo: HM Treasury -
Mr Johnson and Mr Sunak visit the headquarters of Octopus Energy in London in October 2020. Getty Images -
With his 'Winter Economy Plan' outside 11 Downing Street in September 2020. AFP -
Decorating a plate at Emma Bridgewater pottery in Stoke pottery in September 2020. Getty Images -
Promoting 'eat out to help out' on the Isle of Bute, Scotland, in August 2020. Getty Images -
A member of the public takes a selfie with Rishi Sunak during a visit to Scotland in August 2020. AFP -
Visiting a Wagamama restaurant in central London in July 2020. Photo: HM Treasury -
Rishi Sunak visits a Pret A Manger in Westminster in July 2020. HM Treasury -
With Mr Johnson at his first Cabinet meeting after a reshuffle at 10 Downing Street in February 2020. Getty Images -
Mr Sunak speaks during a general election debate in Cardiff in November 2019. Getty Images
Those on universal credit could receive £650, disability benefit recipients £150 and pensioner households £300, with some people able to claim all three.
But the energy price guarantee is set to increase from a £2,500 bill for the average home to as much as £3,100 from April, The Times said.
Treasury sources would neither confirm nor deny speculation before Thursday’s statement.
Mr Sunak hinted at keeping the pensions triple lock — which guarantees an increase in line with average earnings, inflation or 2.5 per cent, whichever is higher — on his flight to the G20 in Bali.
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“My track record as chancellor shows I care very much about those pensioners, particularly when it comes to things like energy and heating because they are especially vulnerable to cold weather," he said.
“That’s why when I announced support earlier this year as chancellor we made extra provision for pensioners to receive up to £300 alongside their winter fuel payments to help them cope with energy bills over the winter.
“So I am someone who understands the particular challenge of pensioners. They will always be at the forefront of my mind.”
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He declined to comment on any specifics in the financial statement, but stressed that “we will put fairness and compassion at the heart of all the decisions we make”.
State pensions and benefits increased by 3.1 per cent this year, after the triple lock was temporarily suspended for a year.
Mr Sunak’s predecessor Liz Truss had promised to retain the triple lock during her brief stint at No 10.
Ms Truss had also planned supply side reforms and the liberalisation of planning rules in her quest for economic growth.
Asked if he will push ahead with those plans, Mr Sunak promised “an approach to planning that ensures that we get homes built in the places that we need them to be built, bring communities along with us on that.
“With regards to supply side reform, I think there’s lots we can do — not just planning, free ports are a good example of that, the labour markets are another opportunity, regulation when it comes to technology and innovation, there’s a bill going through Parliament on gene editing, or financial services.”
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Mr Sunak and Mr Hunt are considering allowing local authorities to impose larger rises in council tax next year to raise money for social care.
Current rules mean local authorities with social-care responsibilities must call a referendum to increase council tax by more than 2.99 per cent.
The Daily Telegraph reported that figure could increase to allow rises up to 5 per cent without a public vote, something that could result in B and D houses paying £100 a year more, with annual bills topping £2,000.
