It comes after a key figure used to calculate the triple lock, which guarantees the state pension increases every April, was revised upwards in a boost for pensioners
Millions of pensioners are on course for a bigger state pension boost than previously thought.
It comes after a key figure used to calculate the triple lock, a policy that guarantees the state pension increases every April, was revised upwards on Tuesday. The triple lock ensures state pension payments go up each year in line with whichever is the highest out of average earnings growth, inflation, or 2.5%.
Office for National Statistics (ONS) data released today showed an upwards revision to total wage growth for the quarter to July, up to 4.8%, from 4.7% in a previous estimate. Inflation figures for September are due to be released next week – but the most recent figure was lower than wage growth at 3.8% in August.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said of the revised figures: “This has consequences for people getting state pension who can expect the amount they get to go up ever so slightly from next April.
“Those on the full new state pension could be on course for £241.30 per week rather than £241.05 while those on the full basic state pension will see their weekly payment rise to £184.90 rather than £184.75.”
The current state pension rate stands at £230.25-per-week while the basic state pension stands at £176.45-per-week.
She added: “Of course we are still waiting for the final piece of the triple lock puzzle to click into place with inflation figures published next week the key figure. However, with inflation currently hovering at 3.8% the likelihood is that average wages will be the figure used.”
Steve Webb, a former Pensions minister during the coalition government and now partner at pension consultants LCP said: “We can now be pretty certain that the new state pension and the basic state pension will rise by 4.8%. This will keep the headline rate of the state pension below the income tax threshold for one more year, but it will go above the tax threshold in 2027 if allowances do not rise”.
Labour committed to keeping the state pension triple lock in its election manifesto last year. Speaking last month the new Work and Pensions Secretary Pat McFadden, said: “This Labour government is committed to maintaining the Triple Lock for the course of this Parliament.
“It is estimated that will mean a rise in the state pension of around £1,900 a year by the end of the Parliament. That’s a commitment from the Labour government to the UK’s pensioners. It’s something that we said we’d do at the election and something that we will keep to.”
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