London Daily

Focus on the big picture.
Saturday, Feb 21, 2026

Chancellor Rishi Sunak hints at ruling out 8% pension rise

Chancellor Rishi Sunak hints at ruling out 8% pension rise

The chancellor has given his strongest indication yet of ruling out a predicted 8% rise in the state pension next year.

Official forecasts suggest that the link with earnings growth could mean the bumper rise in the amount paid from April 2022.

Rishi Sunak told the BBC a decision on pensions would be "based on fairness for pensioners and for taxpayers".

Various commentators have called for an overhaul of the rules.

However, groups representing older people say the government's promises to pensioners should remain.

Mr Sunak told BBC Radio 4's Today programme: "The triple lock is government policy but I recognise people's concerns about what that might mean, given some of the numbers that are being put around.

"We will approach these decisions with fairness in mind - fairness for both pensioners but also for taxpayers."

He said there were "some questions around the earnings numbers".

Why would the state pension rise?


The rise in pensions each year is governed by what is known as the triple lock - a Conservative manifesto promise until at least 2024.

This means the state pension increases in line with the rising cost of living seen in the Consumer Prices Index (CPI) measure of inflation, increasing average wages, or 2.5%, whichever of those three is highest.

Predictions by the Bank of England suggest that average earnings could go up by 8%, hence the equivalent rise in the state pension.

That would cost the Treasury £3bn more than previously anticipated, according to the government's official forecaster - the Office for Budget Responsibility.

Many economists point out the sharp rise in earnings is an anomaly created, in part, by calculations being affected by people coming off furlough.

Can the chancellor break the promise?


There is no reason in law why the chancellor cannot change the way earnings are judged in the triple lock system.

He is certainly under pressure to do some from some quarters.


Lord David Willetts, president of the Resolution Foundation, a think tank focusing on people on lower incomes, said: "The Covid crisis has laid bare the design faults of the triple lock, with a severe jobs crisis last year inadvertently contributing to an unnecessary and unjustified 8% rise in the state pension next year.

"The chancellor should take the opportunity this autumn to replace the triple lock with a smoothed earnings link. This would mean the state pension would rise in line with the living standards of working age people - a change that would be fair to all generations."

However, Caroline Abrahams, charity director at Age UK, said: "We do not think the government should rush headlong towards a decision to suspend it. Pensioner poverty has been rising in recent years.

"While older people we speak to are generally keen to do their bit to help as the pandemic continues, they are also wary of unscrupulous policymakers who might want use exceptional times as a reason to make permanent changes - a government sleight of hand that would not be acceptable at all."

How can 'fairness' be judged?


The chancellor said that he would hold "fairness in mind" for any decision that it is made, but fairness can be hard to quantify.

At present:

*  The full, new flat-rate state pension (for those who reached state pension age after April 2016) is £179.60 a week

*  The full, old basic state pension (for those who reached state pension age before April 2016) is £137.60 a week

That is one of the least generous state pensions in Europe, even if there was a significant rise next year.

The former pensions minister, Baroness Ros Altmann, also pointed out that, for many people, the state pension was their only retirement income.

"Millions of pensioners - especially women - rely solely on state pensions because they did not have the opportunity to build up private pensions when younger," she said.

She has called for a wholesale review of pensioner benefits, rather than a short-term change in the rules.

Other considerations of "fairness" might also include the wide range of life expectancy in different parts of the country, the different rules determining the rise in Pension Credit - a state pension top-up, and the expectations of younger people about their eventual state pension entitlement.


At a time when the official recommendation for the main NHS pay award is well below inflation, a rise of 8% for the state pension would appear to be an outlier.

The chancellor's comments this morning are the clearest indication that it will not happen.

To be clear, it is very much a distortion. Average earnings were depressed in the pandemic by a reduction in hours worked. The official figures showed earnings were falling. From this lower base, the resumption of normality will lead to a very high number, when comparing one quarter this year to the same quarter in 2020 during lockdown.

But this also reflects the design of the triple lock. As the OBR put it, "it has no memory". The point of the lock was, last year, to deliver a 2.5% rise in pensions this year, despite earnings being -1% and inflation being just 0.5%.

The state pension was shielded from what was happening everywhere else in the economy last year. But its current design disregards that history and will lead to a compensatory bumper boost, if it is measured as in the past (growth in the quarter to July over same quarter last year), although we won't get the figures until autumn.


Chancellor Rishi Sunak: "We want to make sure the decisions we make are fair... both for pensioners and for taxpayers"


Newsletter

Related Articles

0:00
0:00
Close
UK Confirms Preferential U.S. Trading Terms Will Continue After Supreme Court Tariff Ruling
U.S. and U.K. to Hold Talks on Diego Garcia as Iran Objects to Potential Military Use
UK Officials Weigh Possible Changes to Prince Andrew’s Position in Line of Succession Amid Ongoing Scrutiny
British Police Probe Epstein’s UK Airport Links and Expand High-Profile Inquiries
The Impact of U.S. Sanctions on Cuba's Humanitarian Crisis: A Tightening Noose
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
British Co-founder of ASOS falls to his death from Pattaya apartment
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK Government Considers Law to Remove Prince Andrew from Royal Line of Succession
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
Two teens arrested in France for alleged terror plot.
Nordic Fracture: How Criminal Scandals and Toxic Ties are Dismantling the Norwegian Crown
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
AI Pricing Pressure Mounts as Chinese Models Undercut US Rivals and Margin Risks Grow
Global Counsel, Advisory Firm Co-Founded by Lord Mandelson, Enters Administration After Client Exodus
London High Court dispute over Ricardo Salinas’s $400mn Elektra share-backed bitcoin loan
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Four Chagos Islanders Establish Permanent Settlement on Atoll
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
France President Macron says Free Speech is Bull Sh!t
Viktor Orbán getting massive praise for keeping Hungary safe, rich and migrant-free!
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
×