State pensioners will be handed a bumper £629 Triple Lock boost according to new figures which have just been released.
The Triple Lock is a guarantee that state pensioners’ benefits will be increased each year to account for inflation, in order to maintain pensioners’ spending power at the same level in real terms.
Every new financial year, the state pension must increase by one of three key metrics: CPI inflation, wage growth or a flat 2.5 percent, whichever is highest.
And new figures released today suggest that wage growth is going to be the determining factor in the Triple Lock next April, with the annual state pension now expected to rise by £629, based on wage growth of 4.1 percent in the latest ONS figure for July and revised today.
The latest wage growth figures would put the weekly state pension up from its current £218.20 a week to £230.30 per week, or £11,975.60 per year, an increase of £629 on the current £11,346.40 this year.
The old state pension will go up to £176.45.
Although there are fears for the long term viability of the Triple Lock because of the large and somewhat unpredictable cost to the public purse, Labour have pledged to maintain the Triple Lock for their term in Parliament.
Sir Steve Webb said the additional 0.1 percentage point could add around £100m to the state pension bill
He said: “A slightly higher rate of increase is welcome for pensioners, though will be an unwelcome £100m extra cost for the chancellor as she prepares her budget.
“The rate of the new state pension will now be close to £12,000 per year, very near to the £12,570 tax-free personal allowance. This is likely to put extra pressure on the chancellor to take action on tax allowances in the coming years.”