State Pension to rise for millions next year by £962 as inflation hits 10.1%
MILLIONS of people are set for a bumper rise to their State Pension payments next year because of rocketing prices.
Inflation has now hit double figures at 10.1% in the 12 months up to July, new figures released today reveal.
Retirees are expected to benefit from rising inflation after the government confirmed that the State Pension triple lock will return next year.
The triple lock means payments rise each year whichever is highest of the three figures: inflation, wages or 2.5%.
With inflation rocketing, it's this figure which is expected to dictate next year's rise, which takes effect from April.
The new state pension maximum amount is now £185.15 and could rise to around £203.70 a week in 2023.
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That's if inflation stays at the current rate of 10.1%. It would push up State Pension payments by an extra £18.70 a week - or £962.10 a year.
Conservative leadership candidate, Liz Truss, said on the pensions triple lock: “I won’t fudge the figures, I’m fully committed to the triple lock, which gives the highest rate.”
The triple lock calculation for the annual rise to the old age benefit was temporarily suspended because of the pandemic and was reduced to a double lock.
Wage growth was removed from the uprating because the coronavirus skewed wage data that would have given pensioners a bumper pay day.
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Instead the state pension rates increased by inflation of 3.1% in April, based on last year's inflation figures.
But as inflation is currently far higher at 10.1% and a rise won't come until next year, many pensioners are likely to feel worse off in the meantime.
Prices have shot up including food, fuel and energy costs - and the Bank of England predicts inflation could even hit 13% this year.
If that figures goes as high as 13% it would go up by £24.07 a week, or £1,255 a year.
A rise would also push up pension credit amounts for the most hard-up pensioners.
The rise will be based on whatever the rate of inflation is in September this year, and it could still be higher or lower then.
Those living off the state pension face a tough wait until the benefit "catches up" to current inflation rates.
The energy price cap increased by 54% in April adding hundreds of pounds to bills and is set to rise to £5,300 a year this winter, experts have warned.
The government previously announced a package of support that will see pensioners get one-off payments worth hundreds of pounds between now and next year's state pension rise.
Millions of pensioners will get a £300 payment in October to help cover the rising cost of heating homes over winter.
Pensioners on the lowest incomes will get a £650 payment along with others on benefits like Universal Credit from July.
And those with disabilities could be eligible for a £150 payment.
Anyone struggling with higher bills or worried about debt can get help.
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There are plenty of organisations where you can seek advice for free, including:
- - 0808 808 4000
- - 0800 138 1111
- - 0808 800 9060