The state pension could rocket 10% next April after the government confirmed that the triple lock would be reinstated.
The triple lock is a formula for guaranteeing the state pension will hold its value over time. Under it, the state pension increases either by earnings, inflation or 2.5% - whichever is higher.
However, chancellor Rishi Sunak blocked an expected increase of 8% in April this year, after the DWP said earnings figures had been ‘distorted’ by the pandemic. Pensioners received an increase of just 3.1% instead - a devastating cut in real terms as inflation hit a 40-year high of 9% in April.
Now the government has confirmed the triple lock is to be restored after a one-year suspension, with the uplift due to come into play in November.
This means pensioners will be looking to the September inflation figure - traditionally used for the triple lock. By this time, inflation could be in double digits. The Bank of England expects it to peak at 10.25% during the final quarter of this year.
This would give pensioners a much-needed uplift. For those who receive the new state pension - currently £185.15 a week or £9,627.80 a year - a 10% rise would mean weekly payments of £203, providing an annual income of around £10,600.
For those who retired before 6 April 2016 and receive the old basic state pension, the same 10% rise would mean weekly payments would rise from £141.85 to £156.03, meaning an increase in their annual income from £7,376.20 to £8,113.82.
Wondering how much state pension you will get and when? Take a look at our article on how to check your state pension for more.
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