If inflation stays high, under the Triple Lock it could drive yet another significant rise in the State Pension, according to pensions consultancy Broadstone.
After the government honoured the Triple Lock pledge with a 10.1% increase to the State Pension for the 2023/24 financial year, those on a full State Pension now receive £10,600 a year – an increase of nearly £1,000 compared to the previous year (2022/23).
However, if inflation prove more persistent than forecast, this could add hundreds of pounds to the State Pension, depending on the level in September, when the Triple Lock increase is set .
Brodstone calculates that if CPI stays at 8%, the State Pension would rise by £848 to £11,448 a year. Even if inflation drops to 6% it would see a £636 increase to the benefit.
Damon Hopkins, head of DC Workplace Savings at Broadstone, said: “Retirees could be set for yet another significant boost to the State Pension.
“Having benefitted from around a £1,000 increase to their State Pension last year, another substantial triple-lock hike will further embed its importance to the retirement income of millions of pensioners – present and future.
“Given the delicate state of the government’s finances it will raise further questions around the viability of the Triple Lock. That said, it would take a brave Prime Minister to break a key manifesto pledge for the second time in three years so close to a General Election.”
