The state pension is set to rise by over £400 next year, providing a significant boost for millions of pensioners.
According to Treasury calculations, the increase will outpace inflation, thanks to the state pension’s “triple lock” mechanism.
This policy ensures pensions rise each April by whichever is highest: inflation, average UK wage growth, or a minimum of 2.5%.
With next week’s wage growth data expected to be the deciding factor, the boost will likely push the full state pension up to around £12,000 per year for those who qualify.
This increase comes as the government faces criticism for slashing winter fuel payments for many pensioners, which means that while pensions are rising, many people will see a net income increase of only £100 to £200, after losing this vital support.
For those who retired before 2016 and who could have also benefited from a secondary pension, the basic state pension is expected to go up by at least £300, reaching £9,000 annually.
The final decision on these changes will be made by Pensions Secretary Liz Kendall ahead of next month’s Budget, though Chancellor Rachel Reeves reaffirmed the government’s commitment to maintaining the triple lock through the end of this Parliament.
While popular with pensioners, this guarantee comes with a high price tag, costing the government £130 billion per year.
The triple lock system, introduced in 2010 by the Conservative-Liberal Democrat coalition, was designed to ensure that pensions would keep pace with the rising cost of living or the general increase in wages.
However, critics argue that scrapping the winter fuel payment for many elderly people will leave hundreds of thousands, particularly those in rural areas, struggling financially.
Campaigners and opposition parties have raised concerns about the effect of this cut on pensioners living in poverty, including warnings from former pensions minister Sir Steve Webb, who noted that around 1.6 million older people living in poverty could lose their winter fuel payments, leaving them more vulnerable as energy costs rise.
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