Millions of pensioners are awaiting the announcement of their State Pension increase. This is expected to be around £460 for many, although the exact figure is yet to be confirmed.
The rise in pensions, which occurs every April, is determined by the ‘triple lock’ guarantee. This is the highest of average wage growth between May and July (including bonuses), September’s Consumer Prices Index (CPI) inflation measure, or 2.5%.
The Office for National Statistics has already confirmed that the average wage growth for the period was 4%, higher than the current inflation rate of 2.2%. However, the final confirmation will come with the publication of the September inflation figure, due mid-October.
This year’s figure will be available on October 16, at which point the pension rise will be confirmed. With inflation unlikely to exceed 4%, it is anticipated that pensioners on the new State Pension will receive an extra £460 annually, increasing their yearly pension from £11,502.40 to £11,962, a weekly rise from £221.20 to £230.
Those on the old State Pension, who retired before April 2016, will see a smaller increase of £353 per year, raising their annual pension from £8,814 to £9,167, a weekly increase of £6.60 from £169.50 to £176.30. Those on the older system who also receive SERPS payments will see that part increase in line with inflation, the figure for which has not yet been released, reports Birmingham Live.
The triple lock, introduced by the Conservative-Liberal Democrat coalition government in 2010, was designed to ensure that the value of the state pension did not fall behind the increase in the cost of living or the incomes of working people. Chancellor Rachel Reeves has stated that a Labour government would maintain the triple lock until the end of the current Parliament.
However, there are concerns about the future of the pension under Labour, after the party abolished the Winter Fuel Payment for millions of pensioners. The £300 Winter Fuel Payment, previously given to all pensioners, will now be means-tested and only paid to those receiving certain benefits, as announced by the Chancellor.