PENSIONERS could see their income rise by £300 next year after higher than expected inflation figures were revealed today.
The government has paused the triple lock for a year because of the coronavirus pandemic.
It means that the state pension will rise at the rate of inflation or 2.5% – whichever is highest.
Fresh figures today reveal inflation is 3.2%, which would add an extra £5.75 a week to payments of the new state pension.
The government last week dropped earnings as the third measure that can dictate the amount the state pension rises.
Earnings growth is expected to be unusually high at around 8.8% because of the pandemic, which could have given pensioners a bumper pay rise of £700 a year.
But those in retirement will still get more money next April when state pension rates rise.
Experts have predicted that inflation in October will be 3%, but the data today indicates that it could be higher.
The Bank of England predicts inflation could even reach 4% by the end of the year.
But it's the all important September inflation figure which will be revealed in October which will determine how much state pension payments rise by.
The pension will always rise by a minimum of 2.5% under the triple lock, even as it's paused, but if inflation is higher it will rise by that amount.
Inflation could still be more or less than the current rate of 3.2%, but here's what you could get.
Kate Smith, head of pensions, at Aegon said: "Today’s figures come one month ahead of the all-important inflation figure for September which will confirm how much the state pension increases by in April.
"With inflation rising steeply in August and expected to continue this path to the end of the year, state pensioners could see a substantive increase in payments in April, even with the earnings element of the triple lock stripped out.
The pensions firm said that an increase of over 3% has only happened three times since the triple lock was introduced a decade ago.
How much will the state pension rise next April?
The current new state pension is worth a maximum of £179.60 a week, or around £9,339 a year.
A rise of 3.2% would add an extra £5.75 a week to the payment increasing it to £185.35 a week.
Over the year that's £9,638 and an extra £299 a year.
Men born on or after April 6, 1951, or women born on or after April 6, 1953, will be able to claim the new state pension.
How much you get depends on how many years of National Insurance contributions.
You need a minimum of 10 "qualifying" years to get anything at all and 35 will get you the maximum amount.
Those who reached the state pension age before April 6, 2016, get the old state pension, known as the basic state pension.
Those getting their pension through the old system may also get a top-up from the additional state pension, depending on circumstances.
The basic part of the old state pension is currently worth £137.60, or £7,155.20 a year.
A rise of 3.2% would add an extra £4.40 a week to the payment, increasing it to £142.
Over the year that's £7,384 and an extra £228.80.
Thousands of pounds worth of benefits, perks and discounts are going unclaimed in retirement – here's how to claim.
Meanwhile many Brits retiring this year have been left waiting months for their state pension because of delays.
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