Millions of state pensioners receiving the new and old payments are in for a significant cash boost yet again as Chancellor Jeremy Hunt confirmed the triple lock will be reinstated in his Autumn Statment last month.
Recent figures show that average earnings have increased by 8.5 percent this year, whereas inflation has come down to 6.7 percent.
Under the Triple Lock, the state pension rises each year in line with inflation, earnings or 2.5 percent – whichever is higher.
So, going by the triple lock, the state pension would be due to boost by 8.5 percent at the start of the next tax year – April 6, 2024.
This means that someone on the full new state pension will see payments go up from £203.85 per week to £221.20.
The state pension is typically paid every four weeks, meaning claimants could get up to £884.80 each pay period.
Over the 2024/25 financial year, this is an boost of £902, taking the annual income from state pension alone from £10,600 to £11,502.
Similarly, someone on the full rate of the old or basic state pension will see payments go up from £156.20 per week to £169.50 – this amounts to £678 each pay period.
Over the 2024/25 financial year, this is an boost of £692, taking the annual income from £8,122 to £8,814.
Mel Stride MP, secretary of state for work and pensions, confirmed after the Autumn Statement that the new payment rates for state pensions and benefits will come into effect on April 8, 2024.
He also confirmed that working age and disability benefits will boost by the September CPI rate of 6.7 percent. Tax Credits, Child Benefit and Guardian’s Allowance – delivered by HM Revenue and Customs (HMRC) – will also rise by 6.7 percent.
Patrick Thomson, head of research and policy at Phoenix Insights explained that state pensioners will welcome the news that the government has committed to maintaining the triple lock without adjustments.
Being such a vital policy – which ensures retirees’ income has kept pace with rising prices or increases in the working population’s wages – many will be relieved there were no changes.
However, some experts explain that tinkering with the triple lock measure will be something the government would have been loathed to do given it will upset the Conservative party’s core voters.
Jon Greer, head of retirement policy at Quilter said: “There is a growing problem with the state pension and it’s unfortunate but not unsurprising that this government have not opted to make long-term but potentially unpopular decisions about reforming how our state pension is uprated.
“The potential reform of how the state pension is calculated requires a delicate balance between protecting the income of retirees and ensuring the long-term sustainability of the pension system. The triple lock system can be financially unpredictable and may not be sustainable in the long run.”
Mr Greer suggested a more sustainable approach such as linking pensions to a fixed percentage of average earnings. This method would align pension increases with the economic prosperity of the country, ensuring that pensioners’ incomes grow in tandem with the working population.
The current annual full new state pension is £10,600
- Weekly: £203.85
- Every four-week pay period: £815.40
The 8.5 percent boost in April 2024 will take the total to £11,502 (up £902)
- Weekly: £221.20
- Every four-week pay period: £884.80
The current annual full basic state pension is £8,122
- Weekly: £156.20
- Every four-week pay period: £624.80
The 8.5 percent boost in April 2024 will take the total to £8,814 (up £692)
- Weekly: £169.50
- Every four-week pay period: £678.00
The amount of state pension once receives depends on the amount of National Insurance contributions one has.
For more details and information, Britons can visit the Government website.
