Every state pensioner is in line for a £460 boost to their income thanks to the latest Triple Lock calculations.
The DWP is mandated to revise state pension payouts each year thanks to the ‘Triple Lock’ system which means pensions must increase by the same amount as average wages, inflation or a flat 2.5 percent, whichever is highest.
New figures released this week confirm wage growth has hit 4 percent in the three months to July, meaning that it is likely to be the figure used to calculate next spring’s Triple Lock boost to pensions, given that inflation sits at 2 percent.
The final figure will be calculated this autumn but it would mean at least £460 extra for state pensioners, bringing their pension to £11,962.60 a year from April 2025.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, cautioned the rise in the state pension will only partially offset the pain for the millions of pensioners who are being stripped of their winter fuel allowance.
She said: “There’s every chance it’s not enough to placate those pensioners still reeling from the loss of the winter fuel payments, especially given how close this is edging to busting the personal allowance.”
She warned the new annual pension is moving closer to the £12,570 personal tax allowance.
“Given that the freeze to this threshold is expected to remain in place until 2028, it raises the spectre of the full state pension alone taking pensioners over it and into the realms of paying income tax during the next few years.”
Liz McKeown, director of economic statistics at the ONS, said: “Growth in total pay has slowed markedly again as one-off payments made to many public sector workers in June and July last year continue to affect the figures.
“Basic pay growth also continued to slow, though less sharply.
“When taken together on a comparable basis, our different measures all show growth in the number of employees over the latest quarter, though annual growth has slowed over the year.”
