- The state pension will increase by 8.5 per cent next April
- This is well above the current inflation rate
The government has confirmed that the state pension will increase by 8.5 per cent in April 2024 in line with the pension ‘triple lock’, despite pressure for it to adjust the figures and use a lower raise.
The triple lock mandates that the state pension rises every year in line with whichever is the highest between average annual earnings growth from May to July, inflation in the year to September or 2.5 per cent.
The earnings growth figure was the highest of the three this year, at 8.5 per cent. However, there had been speculation the government would tweak the numbers and use a lower 'smoothed' 7.8 per cent wage growth figure, which excludes bonuses, or scrap the earnings element of the triple lock altogether.
The consumer price index (CPI) was up 6.7 per cent year-on-year in September 2023 and 4.6 per cent in October 2023, so the 2024 state pension boost will comfortably beat inflation. An 8.5 per cent increase will see the new state pension jump from the current £10,600.20 a year to £11,501.22 in April 2024.
With the personal allowance still frozen at £12,570, this will result in hundreds of thousands of pensioners paying income tax for the first time next tax year. While the state pension is rising, it still falls short of the £12,800 a single pensioner needs for a minimum standard of living in retirement, as per the Pensions and Lifetime Savings Association’s Retirement Living Standards.
