The UK state pension is set to rise by 3.9% next year, it appears, following today’s wage growth figures.
Under the triple-lock system, pensions rise by the highest of average earnings, inflation, or 2.5%.
So today’s data showing that total pay rose by 3.9% over the last year is likely to be the figure used to set the pension increase (unless we get a surge of inflation in September’s data to 4% or higher).
Assuming, of course, that the government continue to stick with the triple-lock – as there are calls to suspend it.
Jon Greer, head of retirement policy at Quilter, says:
double quotation mark“Today’s earnings figures show wage growth running at 3.9%, which puts a State Pension increase of a similar magnitude firmly on the cards next April under the triple lock.
“If confirmed, this would see the full New State Pension rise to over £13,000. While we will need to wait for September’s inflation figure before the uprating mechanism is formally confirmed, inflation is currently expected to remain below earnings growth, making an earnings-led increase the most likely outcome.
“For pensioners, another above-inflation increase will be welcome news and reflects the success of the triple lock in strengthening the value of the State Pension over time. The State Pension remains a crucial source of retirement income for millions of people and continues to provide the foundation upon which many build the rest of their retirement plans.
