The latest figures from the Department for Work and Pensions (DWP) show that in August the number of people receiving the State Pension rose by 1.1% to 12.5 million across the UK, of which more than one million are living in Scotland.
State Pension increases every year as part of the annual benefits uprating and due to the current record-breaking Consumer Price Index (CPI) inflation figure, which came in at 9.9% for August, pension experts are predicting a “significant” increase for millions of people next year.
In April this year, benefits delivered by DWP and State Pension, increased by 3.1% following the temporary suspension of the triple lock guarantee. The triple lock rule ensures that State Pension increases each year in line with whichever is highest of inflation as measured by the CPI, average earnings, or 2.5%, however, the average earnings benchmark was suspended for the 2022/23 financial year due to the economic impact of the coronavirus pandemic, but the DWP insisted earlier this year that this was for one year only.
Prime Minister Liz Truss has also pledged to reinstate the triple lock this year.
Next month’s CPI inflation figure is used as part of the triple lock and although the August figure of 9.9% was down slightly from July’s 10.1%, it is expected to go up again for September which will trigger a huge rise in weekly payments next year, taking the full, new State Pension to more than £200 per week.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Inflation eased this month, but it still remains sky high and looks set to stay so for the foreseeable future.
“This means pensioners are in line for a significant pension boost next year as long as the government keeps its pledge to keep the triple lock.
“The new wage data put average wage growth at 5.5% so pensioners are already in line for a record-breaking increase, albeit one that is well below inflation. If the link to CPI remains, then we could see pensioners on a full new State Pension get more than £200 per week.”
Helen added: “Last year’s 3.1% increase was no match for soaring inflation and has left many pensioners struggling and so a more generous increase will be welcomed. However, any such increase will not kick in until April which feels a very long way away right now for those struggling to make ends meet."
State Pension payments with 9.9% uprating 2023/24
An increase of 9.9% could potentially see older people receive a weekly increase of up to £18.35 which would be an extra £73.40 per four-weekly pay period - based on UK Government rounding policy.
The following calculations are estimates based on CPI inflation at 9.9%.
New State Pension
- Weekly: This could increase from the current rate of £185.15 per week to around £203.50
- Per 4-weekly pay period: From £740.60 to around £814
Old Basic State Pension
- Weekly: This could increase £14 per week from the current rate of £141.85 per week to around £155.85
- Per 4-weekly pay period: From £567.40 to around £623.40
People receiving State Pension can choose to be paid either weekly or every four weeks - not to be confused with being paid monthly as the DWP makes 13, four-weekly payments each year over a 52-week period which can result in two payments being made in the same calendar month.
State Pension is a contributory benefit, you will need at least 10 years’ worth of National Insurance Contributions to qualify for any payment. You will need 35 years to qualify for the full, new State Pension.
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