The exact amount older Britons will receive from state pension payments has been confirmed following today’s inflation news.
This morning, figures from the Office for National Statistics (ONS) revealed that the consumer price index (CPI) rate for the 12 months to September 2024 fell to 1.7 per cent.
While this is beneficial for consumers and signals potential cuts to interest rates later this year, it also confirms how much pensioners should set to receive from the Department for Work and Pensions (DWP) next April.
This is because of the triple lock, which is the metric used to determine the annual payment rate increase to state pensions.
Under the triple lock, payments are raised by either the rate of inflation, average earnings or 2.5 per cent; whichever is the highest figure.
The inflation figure is based on the rate for the previous September while wage growth earnings are from May to July of the same year.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Britons are preparing for the state pension to rise next yer
GETTY
With inflation for the year to September easing to 1.7 per cent, average earnings will be used to determine how much pensions will rise.
Yesterday, wage growth over the three months to July was revised to 4.1 per cent which is slightly higher than the previous estimate of four per cent.
Former pensions minister Steve Webb, a partner at LCP, warned that this revision would cost the taxpayer around an extra “unexpected” £100million.
According to the retirement expert, this will place further pressure on Chancellor Rachel Reeves as she attempts to balance the book and plug the £22billion “black hole” in the public finances.
Reeves will reiterate the new Labour Government’s promise to maintain the triple lock during her statement on October 30.
Becky O’Connor, the director of Public Affairs at PensionBee, warned that older Britons may not receive the full benefit of the triple lock due to recent cuts in spending.
She said: “The latest official data pretty much inks in a rise of 4.1 per cent in pensioner incomes from the State Pension, from next April.
“For a retiree on the full new state pension, this means a £473 increase, taking their annual income to £11,975 and inching closer to the personal income tax allowance of £12,570.
Pensioners are preparing to lose energy bill support GETTY
“Most pensioners do not receive the full amount of state pension and the majority must also factor in the loss of Winter Fuel Payments.
“So this rise will be welcome, but the edge may be taken off by biting cuts elsewhere.”
In July, Reeves confirmed the Winter Fuel Payment would no longer be universal for pensioners and will instead be means-tested.
Pensioners now need to be claiming benefits, such as Pension Credit, from the Department for Work and Pensions (DWP) to get it.