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How much state pension will I get? What you’ll receive after the triple lock rate change

Pensioners are set to benefit from a bumper state pension increase in 2024 under the triple lock mechanism.

Due to soaring inflation, the state pension is to increase by 8.5 per cent from April next year, an increase of nearly £1,000 a year.

As a result, the Treasury is under pressure to limit the size of the increase, despite a statement from the Department for Work and Pensions that the Government is “committed to the triple lock”.

Here’s everything we know about how much the state pension is and what it is set to rise to.

How does the triple lock work?

Under the triple lock guarantee the state pension rises every April by either 2.5 per cent, the annual rate of inflation in September or average earnings growth from May to July the previous year – whichever is the highest.

The consumer prices index measure of inflation was 6.7 per cent for the year to September – lower than July’s earnings figure of 8.5 per cent.

Using the normal rules, it would increase in April next year by 8.5 per cent.

How much will pensions rise by in April 2024?

If the 8.5 per cent measure of earnings including bonuses is used, the full basic state pension will rise by £13.30 per week – from £156.20 to £169.50.

The full new state pension will rise by £17.35 per week, from £203.85 to £221.20.

Per year, an 8.5 per cent rise would mean a new state pension rising from the current level of £10,600.20 to £11,501.22.

Will the triple lock be scrapped?

The Government is expected to spend around £9bn next year on pensions. This has led to some calling for the mechanism to be scrapped, for fear that it costs too much public money.

The Office for Budget Responsibility (OBR) has said the triple lock is a “fiscal risk”, due to its upward ratcheting effect – leaving the public finances exposed to ever-higher pension costs.

Many have argued that the 8.5 per cent figure was overinflated, skewed by one-off NHS and civil servant bonuses.

As a result, the Chancellor is considering using a figure for average earnings growth which excludes bonuses, coming in at 7.8 per cent.

Using the 7.8 per cent figure would save the Government £900m and cost pensioners up to £75 a year.

But Becky O’Connor, director of public affairs at the online pension provider PensionBee, said it was “unlikely” the Government would scrap the triple lock altogether and risk losing votes from pensioners.

She said: “While the sustainability of the triple lock as a mechanism for state pension rises remains in doubt, there is little doubt that decent rises help to keep pensioners out of poverty. It’s unlikely the Government would risk losing votes over such a vital part of the state welfare system before a general election.

Neither Labour nor the Conservatives have yet committed to include the triple lock in their manifesto.

Meanwhile, Caroline Abrahams, charity director at Age UK said the Government needed to appreciate that pensioners have had a “really challenging few years”.

She added: “Quite understandably, many older people place huge store on the triple lock promise that was clearly made to them being fully upheld.”

A final decision on the triple lock will be made in the weeks running up to the Autumn Statement on 22 November, after Mr Hunt has seen the detailed forecasts for the public finances produced by the OBR.

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