Pensioners to escape brutal spending cuts as Sunak set to raise living wage in boost for poorest

15 November 2022, 00:47 | Updated: 15 November 2022, 01:07

Pensioners are set to escape brutal spending cuts as Rishi Sunak raises the living wage in a boost for the poorest.

The PM and Jeremy Hunt will accept an official recommendation to increase the living wage from £9.50 an hour to around £10.40 an hour - a rise of nearly 10 per cent - a source told the Times.

Eight million households will also receive cost of living payments worth up to £1,100 as Mr Sunak introduces targeted support for the poorest over universal measures.

Those on universal credit could receive £650, disability benefit recipients £150 and pensioner households £300 - with some people able to claim all three.

However, 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.

Treasury sources would neither confirm nor deny speculation ahead of Thursday's statement.

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It comes after Mr Sunak hinted at keeping the pensions triple lock - which guarantees an increase in line with average earnings, inflation or 2.5%, whichever is higher - as he spoke to during his trip to the G20 in Bali.

"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."

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".

The Prime Minister and Mr Hunt are said to be considering allowing local authorities to impose larger rises in council tax next year to raise money for social care, among their tax-hiking measures.

Current rules mean local authorities with social care responsibilities must trigger a referendum to increase council tax by more than 2.99%.

The figure could increase to allow rises up to 5% without a public vote, according to the Telegraph.

It means B and D houses could end up paying £100 a year more, with annual bills topping £2,000.

Mr Sunak previously said measures will "put our public finances on a sustainable trajectory.”