Moved this thread to The Economy from DAK (leaving a link). Please report if you think there is a more suitable place. Thanks - Chris
Forgive me if this is a naive question, but I've not managed to find the answer with a quick Google.
We're hearing a great deal at present about how implementing the triple lock is becoming too expensive, and how it may need to be reviewed - this extract from a Money Week article is typical:
"The DWP March forecast expected the total state pension cost to rise to £135 billion in the tax year beginning April 2024. But a bumper wage bill for employers has a knock-on impact on the state pension bill which could rise to a total cost of around £138 billion next year. The cost of the triple lock could hit over £10 billion next year, based on ii calculations. The final bill could be lower if inflation or wages fall during July,” (https://moneyweek.com/personal-finance/ ... ost-surges)
But is that £10 billion a net or gross figure? I understand that approximately half of pensioners are taxpayers, so it would appear obvious that a fair proportion of any extra pension will simply be recouped through income tax. Less obviously, some of it would also be recouped when the pensioners blow their windfall through VAT, fuel duty, excise duties etc.
So if (which is my question) the figures are gross expenditure it would seem to be a considerable exaggeration of the actual cost to the Government.