Pensioners Set for 4pc State Pension Rise

Under current law the State Pension is increased each year with a 'triple lock' guarantee:

What is the triple lock guarantee?

Started in April 2010, pensioners receive an increase in state pension based upon the higher of

• Rate of earnings growth
• Consumer Prices Index (inflation)
• 2.5%

The increases for April next year are based upon the September figures this year.  In summary, September 2019's figures will set what state pensions and other benefits increase by in April 2020.

Currently, CPI inflation is expected to be around 2% pa, and wage growth is expected to come in at around 4%pa.  This means that pensioners could get a nice payrise of 4% pa if the figures hold.

If the State Pension does rise by 4% from April 2020, then pensioners could see:

• The full New State Pension would rise to £175.35 from £168.60 per week.
• The full old Basic State Pension would rise to £134.35 from £129.20 per week

The triple lock ensures pensioners do not fall behind the working age population.

Comment

If wages inflation does come in at 4% pa forcing a 4% increase to state pensiosn, we cannot see the triple lock on state pensions remaining for too long.