MILLIONS of pensions will get a £20 a week rise in state pension payments, Chancellor Jeremy Hunt has announced.
Revealed in the Autumn Budget today (November 17), Mr Hunt confirmed that the triple lock would stay.
It means that the maximum state pension amount will rise from £185.15 a week to £203.85 a week – nearly a £20 increase.
This figure is calculated using September’s inflation figures.
These were released last month and showed that inflation has now returned to a 40-year high of 10.1%.
The announcement will be helpful for pensioners feeling the squeeze as the cost of living rises.
The triple lock has been one rule that was always rumoured to be protected.
Asked if he would hike pensions in line with inflation next year, Prime Minister Rishi Sunak insisted he was “someone who understands the particular challenge of pensioners”, adding “they will always be at the forefront of my mind”.
However the self-declared “Scrooge” Chancellor Jeremy Hunt is set to give Town Halls more powers to raise local taxes to pay for social care.
What is the triple lock?
The triple lock rule applies to UK state pensions and means pensions must rise each year in line with the highest of three possible figures: inflation, average earnings, or 2.5%.
The triple lock was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- Earnings – the average percentage growth in wages in Great Britain
- Prices – the rising cost of living in the UK, as measured by the Consumer Prices Index (CPI)
How much is the current state pension?
Your state pension amount depends on your National Insurance record.
Check your state pension forecast to find out how much you could get and when.
The full new state pension is £185.15 per week.
You’ll be able to claim the new state pension if you’re:
- a man born on or after 6 April 1951
- a woman born on or after 6 April 1953
The full basic state pension is £141.85 per week.
You’re eligible for the basic state pension if you were born before:
- 6 April 1951 if you’re a man
- 6 April 1953 if you’re a woman
Last year, the triple lock was paused temporarily last year and a “double lock” removed wages when working out the increase.
Keeping the lock in place would cost £4billion to £5billion, according to AJ Bell figures.
AJ Bell head of retirement policy Tom Selby said: “The difference this decision will make to people’s state pension incomes from next year will be massive.
“Someone receiving the full flat-rate state pension would receive £8.50 per week less, or £442 over the course of the year, if average earnings rather than inflation is used to uprate their benefits.”
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