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The state pension will rise by nearly £500 next year, giving pensioners a welcome boost
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as the government presses on with its plans to mean-test winter fuel payments
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Under the pension's triple lock, the state pension rises each April, in line with whichever is highest of inflation, average wage increases, or 2.5%
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Figures out this morning confirmed that inflation fell to 1.7% in September
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confirming that average earnings data will trigger the triple lock. The triple lockers tied to July's earnings figures, which were published last month
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The figures initially showed that average earnings rose 4% in the year to July
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However, a revision to the figures, published yesterday, bumped up wage growth to 4.1%
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This revision means the new state pension, which applies for people who reach state pension age after April 2016
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is likely to rise from £21.20 per week to £230,000 next year
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The increase is worth around £472 over the course of the year
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The old basic state pension should increase from £169.50 per week to £176.45 next year
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Steve Webb a partner at Lane Clark and Peacock and a former pensions minister said that a slightly higher rate of increase is welcome for pensioners though will be an unwelcome million extra
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cost for the Chancellor as she prepares her budget. In addition, David Brooks head of policy at Broadstone said that it would be a welcome
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financial boost for many pensioners, given the loss of winter fuel payments
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The projected increase to the state pension comes as the government faces a backlash from
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its plans to means test winter fuel payments. The proposed cut will remove the benefit worth
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up to £300 per year from around £10 million pensioners, saving the exchequer up to £1.5 billion
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The government argues that the increase in the state pension will offset any loss of income
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from the winter fuel payments. However, the proposals have still attracted criticism from many
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figures across the political spectrum, with research suggesting many vulnerable pensioners will
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struggle to heat their homes. Stephen Lowe, communications director at Just Group, said pensioners
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will see today's news as bittersweet, given the removal of the benefit. Here at City AM, we'd like to know
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how will estate pension increase affect you? Let us know in the comments below
