State pension could rise by four per cent next year, putting hundreds more in the pocket of Britain’s elderly
- Anyone on full state pension will see weekly payments rise from £168 to £175.35
- Currently state pension is protected by triple lock introduced in 2011
- That means with earnings rising by four per cent, pensions would go up the same
The state pension could rise by an inflation-busting four per cent next April, which would make the elderly better off by hundreds of pounds a year.
Anyone receiving a full state pension will be £351 better off over the course of the year, with payments increasing from £168 to £175.35 a week.
Currently the state pension is protected by the triple lock, introduced in 2011 by the coalition government, which ensures it increases by at least the same rate as the cost of living.
With the lock the state pension rises either by two and a half per cent a year, the rate of inflation or average wage growth, whichever is highest.
Analysis by insurers Aegon found earnings have risen by four per cent, so that will be used to calculate pension rises, the Daily Express reported.
Anyone receiving a full state pension in the UK will be £351 better off over the course of the year, with payments increasing from £168 to £175.35 a week. File image used
Inflation is expected to be a lower figure, so under triple lock rules pensioners will see a bumper increase next year that outstrips price rises.
Steven Cameron, pensions director at Aegon, told the newspaper: ‘Based on the latest earnings growth figures, it looks like state pensioners can look forward to an inflation busting four per cent increase in their state pension from next April.
‘This will be welcome news for current state pensioners. However, these inflation busting increases do come at a significant cost.
‘The state pension is not funded in advance so pensions are funded on a ‘pay as you go’ basis from today’s workers’ National Insurance contributions.’
Concerns have been raised about the long term sustainability of the pension triple lock.
Separate analysis in 2017 found that the state pension had increased by 22.2 per cent between 2010 and 2016 while wages had only risen by 7.6 per cent and prices by 12.3 per cent.
Further figures from the Office for Budget Responsibility found that without the triple lock the state pension bill will increase by £21 billion over the next 40 years, but with the triple lock the cost will soar by £35 billion.
The triple lock is only guaranteed by the Government until 2022.