When the state pension will increase and how much it could rise under the triple lock
The state pension triple lock system is set to return next year, after being suspended during the Covid pandemic.
It means that older people are set to see a significant increase to their weekly payments when the new pension rate comes into effect, with inflation soaring during the cost of living crisis.
However, the Government has faced some criticism for simultaneously opposing above-inflation pay rises for public sector workers – here’s everything you need to know about how the state pension increase works.
What is the current state pension?
The full new state pension currently stands at £185.15 per week, which equates to more than £9.600 a year. This is paid to people reaching the state pension age on or after 6 April 2016.
People who reached the state pension age before this recieve the basic state pension rate of £141.85 a week, or around £7,400 a year.
When will the state pension increase?
The state pension increases in April each year (so the next rate will come into effect in April 2023), with the uprating based on the previous September’s CPI inflation figures.
This year, following the suspension of the triple lock, the state pension rose by 3.1 per cent, which meant the new weekly rate went from £179.60 to £185.15, and the basic rate from £137.60 to £141.85.
How much will the pension rise?
The Government has confirmed the triple lock will be restored for April 2023, meaning the state pension (unlike public sector pay) will rise in line with inflation.
With the triple lock determined by September’s CPI inflation rate, it it predicted that pensioners will get an increase of around 10 per cent next year.
The CPI for May reached 9.1 per cent – its highest figure since 1982 – as the cost of living crisis continues to bite for UK families.
A 10 per cent increase would give those on the new state pension an extra £960 a year, costing taxpayers £10bn, while people on the old rate will get an additional £740 a year.
Boris Johnson’s official spokesman said: “Pensioners, particularly those who receive state pensions, are disproportionately impacted by high energy costs.
“They can’t always increase their incomes through work and they are more vulnerable to cost-of-living pressures.
“And that’s, for example, why we introduced additional support for pensioners as part of our cost-of-living package, the pension and cost-of-living payment of £300. We’ve said the triple-lock freeze was temporary.”
What is the state pension triple lock?
The state pension triple lock ensures it rises every year by whichever is the highest of inflation, earnings growth or 2.5 per cent.
However, the Government controversially amended the policy for April 2022 by removing the earnings link over concerns about affordability.
High earnings growth meant the Government could have spent in the region of £4bn to £5bn if they had not intervened with a double lock increase – the highest of inflation or 2.5 per cent.
This is why insated of older people receiving an increase of about 8 per cent in line with wages this year, their state pension rose by only 3.1 per cent – the inflation rate.
When will I get the state pension?
Under the current system, you can claim the state pension when you reach the age of 66.
According to the Government’s schedule, the stage pension age is set to move to 67 between 2026 and 2028 and then to 68 between 2044 and 2046 (or between 2037 and 2039).
The Department for Work and Pensions (DWP) is due to publish its second review into whether its schedule remains appropriate in May 2023, including a decision on whether the increase to 68 should take place seven years earlier.
If you are eligible, you will receive the state pension within five weeks of reaching state pension age, and then a full payment every four weeks after that.