Perhaps one of the most unexpected announcements made by the chancellor during the Autumn Statement was the confirmation that the government would honour its ‘triple lock’ state pension commitment, despite many rumours that this would be reduced due to the bonuses given to the public sector over the summer.
The government’s ‘triple lock’ guarantee means that from April 2024 both the ‘basic’ and ‘new’ state pensions will rise by 8.5%. Let’s take a look at what this may mean for you:
What is the ‘triple lock’?
First introduced back in 2011, the ‘triple lock’ is a commitment that the government has made to annually increase the state pension by either the growth in average earnings, CPI inflation or 2.5% – whichever is highest. Bar one suspension in 2022/2023, the government has followed through on this promise each year, with the chancellor stating that this has helped 250,000 pensioners out of poverty since its inception.
How much will the state pension rise by in April?
From April 2024, the state pension will rise in line with earnings by 8.5%. This applies to both ‘basic’ and ‘new’ state pensions.
Those on a ‘new’ state pension will see a weekly increase of £17.35 (rising from £203.85 to £221.20 per week), meaning just over £900 more a year.
Those on a ‘basic’ (also known as ‘old’) state pension will see a weekly increase of £13.30 (rising from £156.20 to £169.50 per week), meaning just short of £700 more a year.
Pension Credit (a top-up for those over the state pension age on a low income) will also increase by 8.5%.
These increases will no doubt be a relief to pensioners feeling the pinch of the cost-of-living crisis, with Chancellor Jeremy Hunt commenting that this is “one of the largest ever cash increases to the state pension, showing a conservative government will always back our pensioners”.
Looking for pension advice?
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