Pensioners can expect to see their payments increase by more than inflation
Pensioners could receive an inflation-busting state pension increase next year, which could re-ignite the debate around the sustainability of the triple lock, experts have said. Under the triple lock, the state pension usually rises each April by inflation, wages or 2.5% – whichever is higher.
Myron Jobson, senior personal finance analyst at interactive investor, said: “This inflation reading is significant because it is expected to be used to uprate inflation-linked benefits, such as universal credit, and tax credits in April next year. It also confirms that July’s average earnings are set to provide the latest bumper boost to the value of the state pension in the next tax year, which came in higher at 8.5%.
“This means that the full State Pension payment has grown from 70% of the allowance in 2019/20 to a likely 92% next year, leaving pensioners with only £1,069 of headroom before they begin paying income tax. While the state pension is on the up, it’s worth remembering that it still falls short of the £12,800 a single pensioner needs for even a minimum standard of living in retirement, according to the Pensions and Lifetime Savings Association.
Alistair McQueen, head of savings and retirement at Aviva, said: “Although Inflation has held at 6.7% this month, the oldest households continue to be experiencing the highest rates of inflation, at 7.1% on average, according to Aviva’s ‘age inflation’ index. This is because older households spend a greater proportion of their budgets on food.He added: “Assuming food inflation continues to ease, the gaps between the inflation being experienced by different ages should continue to ease too.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Pensioners could be set for inflation-busting state pension rise next AprilExperts have said that a potential increase to the state pension of 8.5 could re-ignite the debate around the sustainability of the triple lock.
Read more »
Pensioners could be set for inflation-busting state pension rise next AprilExperts have said that a potential increase to the state pension of 8.5 could re-ignite the debate around the sustainability of the triple lock.
Read more »
Rutherglen and Hamilton West’s Michael Shanks to be sworn in as MP todayMichael Shanks won the Rutherglen and Hamilton West by-election and will take the oath to be the representative for the area.
Read more »
You can shop an incredible Eve Lom cleansing kit worth £179 for £60 todayIf you're on the hunt for a luxury new cleanser, you can snap up two from Eve Lom for £60 today in SpaceNK's money-saving double cleanse bundle
Read more »
The cheapest petrol pumps to fill up with in Lancashire today listedFuel prices might be up at the moment but a bit of planning before you fill up can pay dividends
Read more »
The Warm Home Discount scheme starts today - how can you claim it and who is eligible?As the winter months approach, the government is giving a one-off energy bill discount for vulnerable and low-income households.
Read more »