State pension set for inflation-busting rise in 2021/22
22nd October 2020
Retirees will see their state pensions increase by 2.5% next year under the triple-lock scheme.
Under the current rules, the new state pension rises by whichever is the highest of earnings growth, price inflation, or 2.5%.
The price inflation figure used is the consumer prices index figure for September, which is 0.5%, according to the Office for National Statistics.
As earnings growth figure for July was reported at -1%, state pensioners will benefit from a 2.5% increase – 2% above inflation.
People who receive the new state pension of £175.20 per week in 2020/21 will see their weekly benefits increase by £4.40 per week to £179.60 for 2021/22.
The Government was considering abandoning its pledge to the triple-lock in 2021/22 following unprecedented levels of spending to support people’s jobs during COVID-19.
Steven Cameron, pensions director at Aegon, said:
“State pensioners are set for another inflation-busting increase to their state pension next April, subject to any last-minute changes and final Government confirmation.
“While this will be welcomed by state pensioners, concerns remain over both the affordability and intergenerational fairness of maintaining the triple lock.
“The Chancellor faces difficult decisions over whether he can afford to retain the triple-lock as he supports the economy through wave two of the pandemic.”
Speak to us about retirement planning.