People drawing their new state pension from April are likely to see a rise of more than £500 a year, latest wages data suggests.
Under the “triple lock” policy, the state pension goes up each year by either 2.5%, inflation, or average earnings growth – whichever is the highest figure.
The Office for National Statistics revealed total pay including bonuses for the three months to July was 4.7%, which is likely to be the figure used for the annual increase.
The triple lock formula was introduced under the Coalition government in 2011.
Almost 13 million people currently receive the state pension.
The 4.7% increase likely means:
- The new flat-rate state pension – for those who reached state pension age after April 2016 – is expected to increase to £241.05 a week. That will take it to £12,534.60 a year, a rise of £561.60 compared with now.
- The old basic state pension – for those who reached state pension age before April 2016 – is expected to go up to £184.75 a week. That will take it to £9,607 a year, a rise of £431.60 compared with now.
Not all pensioners get the full amount, because it depends on years of qualifying contributions through the National Insurance system.
For many retired people, the state pension is not their only source of income as they will also receive money from workplace or private pensions.
