- Under the triple lock guarantee, from April next year:
- the full ‘new’ state pension will increase from £221.20 per week (£11,502 per year) to £230.05 per week (£11,963 per year); and
- the ‘old’ state pension will increase from £169.50 per week (£8,814 per year) to £176.30 per week (£9,168 per year).
- The ONS today confirmed average growth in earnings for July was 4%. Thanks to subdued inflation, it’s expected this figure will set the increase for the state pension next year.
- The full state pension will be around the personal allowance of £12,570 by 2027/28 if the benefit increases by 2.5% per year after 2025 (assuming the personal allowance remains frozen)
- At some point during this Parliament, the new government will need to address the thorny question of what the state pension should be worth and when Brits should receive it
- The government is facing mounting criticism of its decision to scrap the Winter Fuel Payment for all pensioners except those that claim Pension Credit.
Rachel Vahey, head of public policy at AJ Bell, comments:
“UK pensioners are on track to see a sizeable inflation-beating increase to their state pension next year of almost £500, to just under £12,000.
“The government’s commitment to the triple lock pledge means it’s likely the earnings growth figure of 4% will be used to determine the rise in the state pension next year. And at a time when inflation has fallen back closer to the Bank of England’s targeted rate of 2%, this will give a welcome boost to pensioners’ income in real terms.
“Sticking with its triple lock promise may help redeem the government in the eyes of UK pensioners. The government is coming under more intensive pressure to ‘U-turn’ on its controversial decision to axe the Winter Fuel Payment for all pensioners, except those who claim Pension Credit. And although the increase to the state pension should help meet next year’s bills, it doesn’t help those who will be living close to the edge of their means this winter.
“The triple lock guarantee has worked well in the favour of pensioners over the recent past, boosting the state pension by 28% over the last four years. But with the state pension edging ever closer to the frozen personal allowance of £12,570, and the concept of universal payment coming under increasing scrutiny, the government will have to take the bull by the horns at some point to address who should get the state pension, at what age, and how much.”
Historic ‘new’ state pensions:
