Pensioners are set to receive a £460 boost to the state pension next year after the latest batch of earnings figures were released this morning.
This would mean that the state pension rises to around £11,962 next year from £11,502, an increase of almost £9 per week.
Under the so-called ‘triple lock’, the state pension rises each April in line with whichever is highest of inflation, average wage increases or 2.5 per cent.
Figures released this morning showed that average wages rose 4.0 per cent in the year to July, whereas inflation currently stands at 2.2 per cent.
This means the state pension should rise in line with average earnings.
Liz Kendall, secretary of State for Work and Pensions, will make the final decision before the October Budget.
Still, the government has committed to keep the triple lock in place until at least the end of this parliament.
The projected increase to the state pension comes as the government faces a backlash from its plan to means-test winter fuel payments.
The proposed cut will remove the benefit—worth up to £300 per year—from around 10m pensioners, saving the exchequer up to £1.5bn.
Prime Minister Keir Starmer has suggested that with the triple lock in place, annual increases to the state pension will “outstrip any reduction” in the winter fuel payments.
However, the proposals have still attracted criticism from many figures across the political spectrum, with research suggesting many vulnerable pensioners will struggle to heat their homes.
Simon Kew, head of market engagement at consultancy firm Broadstone, said pensioners would still face pressures despite the state pension increase.
“While this will cushion the blow to many following the means-testing of winter fuel payments, the coming increase to energy bills and sustained rises in the cost of living since the pandemic will still be squeezing pensioners’ budgets,” Kew said.
Starmer faces a crunch parliamentary vote on winter fuel payments later today.