Increase in State Pension

Every year, the state pension rise is determined by the Triple Lock, which guarantees that payments will increase in line with whichever is higher out of the following:

• The rate of Inflation in September of the previous year

• Average earnings between May and July of the previous year

• 2.5%

In 2023 this rose in line with inflation, which was the highest of the three.

It’s not yet clear how much it could rise in 2024. However, with inflation remaining stubbornly high, that could once again influence the rise in pensions next year.

Millions of pensioners could receive an 8.2% rise in their state pension payments in the new tax year, thanks to soaring wage growth.

The Prime Minister has confirmed the state pension will rise by the ‘triple lock’ in 2023-24, which means the benefit will be boosted by either September’s inflation, earnings growth (from the period between May to July) or 2.5% – whichever is highest.

What is the triple lock factor and how does it affect my pension?

The state pension triple lock dictates that each year is increased in line with whichever is the highest of the following three measures: average earnings growth measured from May to July each year; inflation measured in the year from September; or 2.5 per cent.

Currently, the full basic state pension is £156.20 per week, and the full state pension is £203.85 per week.

If inflation is at 6.9 per cent in September as expected, that means that the full basic state pension would rise to £166.98 and the full state pension would hit £217.92 from April 2024.

Earnings are expected to outstrip inflation for the first time but could fall back below the rate of price increases by next month.

This means the slight increase in inflation could add hundreds of millions of pounds to the state pensions bill the Chancellor, Jeremy Hunt, must fund from April next year.