State pensioners may get a pleasant surprise next April with their payments increasing by more than 8.5 percent.
The average earnings figures are the key metric that will determine how much payments go up next year under the triple lock policy, providing an 8.5 percent boost to payments.
Calculating the increases to the nearest penny, this would boost the full basic state pension from the current £156.20 a week up to £169.48 a week while the full new state pension would go up from £203.85 a week to £221.18.
But previous figures from LCP set out that both amounts would increase by a further 2p with an 8.5 percent increase, with the full basic state pension going up to £169.50 a week while the full new state pension will pay £221.20 a week.
Express.co.uk asked former pensions minister Steve Clark, who is a partner at LCP, to clarify how the firm worked out the figures.
He explained: “They are normally rounded to 5p intervals. I suspect when earnings is used they round up otherwise the increase would not strictly keep pace with the legal requirement to increase in line with earnings.”
With these increases, the full basic state pension would go up to £8,814 a year while the full new state pension would increase to £11,502.40.
But figures from interactive investors suggest that by the time the increase comes in next April, a pensioner will need £14,143 a year for a basic retirement.
This means even an individual on the full new state pension will need to find an extra £2,600 to get by. A person on the full basic state pension would need an extra £5,300.
Alice Guy, head of pensions and savings at Interactive Investor, told Express.co.uk what state pensioners should do if they face a shortfall in funds.
She said: “If you’re short of money in retirement then it’s important to make sure you’re claiming everything you’re entitled to.
“It’s estimated that around 800,000 households are missing out on Pension Credit, which works by topping up your income to £201.05 if you’re single and £306.85 if you’re with a partner.
“It will also open the door to a range of other benefits like housing benefit and free prescriptions. If you’re struggling financially then it’s important to speak to someone for help.
“Charities like Stepchange specialise in helping people who are in debt or managing on a tight budget and have trained advisors who may be able to help you maximise your income.”
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