Pensioners could be set for a major income boost next year as sticky inflation could drive yet another significant rise in the State Pension, says leading independent consultancy Broadstone.
After the government honoured its triple lock pledge with a 10.1% increase to the State Pension for the 2023/24 financial year, those on a full State Pension receive £10,600 a year – an increase of nearly £1,000 compared to the previous year (2022/23).
However, inflation is proving more persistent than forecast which could lead to a second consecutive ‘jumbo hike’ in the State Pension.
For example, if CPI stays at its current level of 8% the State Pension would rise by £848 to £11,448 a year. Even if inflation drops to 6% it would drive a £636 increase to the benefit.
Damon Hopkins, Head of DC Workplace Savings at Broadstone, said:
“Inflation is hammering household budgets, and as we’ve just seen from yesterday’s numbers, there doesn’t seem to be any immediate respite.
“While workers may look to their employer for wages to keep pace with inflation, retirees could be set for yet another significant boost to the State Pension.
“Having benefitted from around a £1,000 increase to their State Pension last year, another substantial triple-lock hike will further embed its importance to the retirement income of millions of pensioners – present and future.
“Given the delicate state of the government’s finances it will raise further questions around the viability of the triple-lock. That said, it would take a brave Prime Minister to break a key manifesto pledge for the second time in three years so close to a General Election.”
