Thursday, January 27

State pension to increase by 3.1% next April giving some retirees an extra £5.55/wk

In recent years, increases to the state pension have been based on the so-called’triple lock’, which guarantees payments will rise in line with the larger of either September’s Consumer Prices Index (CPI) measure of inflation as announced in October, wage growth, or 2.5%.

However, it was announced earlier this year that the triple lock will be suspended next April following a sharp increase in earnings after the Covid-19 pandemic. Instead, payments will now be based on the double lock of 2.5% or inflation. But given inflation was confirmed as 3.1% today (down from 3.2% last month) it’s likely this is how much pensions will rise by next year-although the Government has yet to confirm this.

An announcement is expected later this year. See our State Pension guide for more info on what you could be entitled to.

The temporary double lock ignores wage growth

The table below details how the double and triple lock used to calculate state pension increases work: