- The ONS has confirmed the inflation figure for September 2024 as 1.7%, meaning that under the triple-lock guarantee, the state pension should rise next year by the higher increase in earnings of 4.1%
- Under the triple-lock guarantee, from April next year:
- The single state pension will increase from £221.20 per week (£11,502 per year) to £230.30 per week (£11,975 per year)
- The ‘old’ state pension will increase from £169.50 per week (£8,814 per year) to £176.45 per week (£9,175 per year)
- Yesterday the ONS revealed that the average earnings growth in the three months to July is 4.1%, up from its previous estimate of 4%*. This has nudged the expected state pension increase higher than previously expected
- The single state pension is set to exceed the personal allowance of £12,570 by 2027/28, even if the benefit increases by only 2.5% a year (the lowest possible element of the triple-lock guarantee)
- At some point during this Parliament, the new government will need to address the thorny question of what the state pension should be worth and when Brits should receive it
Rachel Vahey, head of public policy at AJ Bell, comments:
“UK pensioners should from next April see a sizeable increase to their state pension of almost £500 a year, to bring it to just under £12,000.
“The chancellor, Rachel Reeves, may choose to shout out about this inflation-beating boost in her first Budget in two weeks’ time. Criticism of the decision to scrap the Winter Fuel Payment for all pensioners except those that claim Pension Credit still lingers, and the government will hope this rise in Brits’ state pensions will publicly reinforce its commitment to the triple-lock, as well as overshadowing the £200 most pensioners will lose this winter.
“But how long they can keep these promises remains to be seen. The state pension is now at a level perilously close to the frozen personal allowance and should overtake it in two years’ time. At that point something must surely give. But slowing the increase in state pension growth or unfreezing the personal allowance both seem unlikely.
“It could be that this fast-approaching crunch time means the government will finally be forced to address the question of how much the state pension should really offer, at what age, and how it can increase payments sustainably each year.”
*ONS Growth in average weekly earnings, 15 October 2024 (ttps://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/october2024)
