Millions of pensioners could be in for a £869 bumper boost to the state pension next year as wage growth soars
- Pensioners are set for an increase to around £11,500 per year if trend continues
- Another large hike would follow the 10.1% bumper increase last year
Millions of pensioners could be set for a state pension boost next year to the tune of £869.
Experts predict rising wages will be the key factor determining by how much the state pension will increase in April 2024.
The state pension increases in line with September’s wages, inflation or 2.5% – whichever figure is the highest, under the so called ‘triple lock’.
With ONS statistics showing an 8.2% rise in pay including bonuses for the months between April and June this year, experts believe an £869 bonus in on the cards if this trend continues.
This means pensioners would get £220.55 instead of £203.85 a week.
Under the triple lock, the state pension increases in line with whatever is the highest figure out of September wages, inflation or 2.5%
The increase to the forecasted £11,500 a year from the current figure of £10,600 would be a welcome boost for many hit by soaring household bills.
July’s inflation figures, to be published tomorrow, will give us an indication of what September’s could look like.
Inflation is currently predicted to fall to 7%, down from its current level at 7.9%, the Sun reported.
If figures released in October show this to be the case, next year’s state pension increase will be determined on wages, which would be the higher number.
The boost would, however, fall short of the bumper rise of 10.1% seen last year.
But the hike would be 2% higher than the 6.2% increase predicted by the Office for Budget Responsibility at the time of the March 2023 budget.
It could mean an added £2 billion slapped onto the Department for Work and Pensions bill, said former pensions minister Steve Webb.
Jon Greer, head of retirement policy at Quilter, said it was unlikely that the government would backtrack on its pledge to keep the triple lock, despite its huge cost.
In addition to the state pension increase next year, millions can also expect a £150-£300 top up to their winter fuel payment.
People are paid the state pension according to the number of years they made National Insurance contributions.
Those with at least 35 years of qualifying payments, may be entitled to the maximum amount.
