People on the DWP Basic State Pension could get up to £718 in their pocket every month

VaselineJune 21, 2024

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People on the DWP Basic State Pension could get up to £718 in their pocket every month

Under the Triple Lock policy, around 9.7 million people on the Basic State Pension could see their weekly payments rise by up to £40 every month from April next year. Both the Conservative and Labor parties have pledged to maintain the Triple Lock for the duration of the next parliament, should they win the July 4 general election.

The Triple Lock ensures new and basic state pensions rise each April in line with the greater of the average annual increase in earnings from May to July, the consumer price index (CPI) in the year to September or 2.5% . Recent data from the Office for National Statistics (ONS) indicates that the CPI inflation rate fell from 2.3% in April to 2.0% in May.

Currently, this makes it the smallest measure of Triple Lock, while the increase in earnings is the largest – and the one to watch. Annual growth in regular earnings (excluding bonuses) was 6.0% from February to April 2024, while annual growth in average total employee earnings (including bonuses) was 5.9%.

If the measure of earnings growth from May to July – due to be published by the ONS on 13 August – remains at 5.9% (including bonuses), it will almost certainly be the driving force behind the State Pension rise in April 2025. The current The full basic state pension is £169.50 each week, or a four-week total of £678. If they saw an annual increase of 5.9%, pensioners would receive £179.65 a week, equivalent to £718.60 every four weeks, or an annual sum of £9,341.80 over the year financial 2025/26, reports the Daily Record.

Around 2.6 million people also benefit from the New State Pension, which currently provides up to £221.20 a week or £884.80 for each four-week period. With an increase of 5.9%, recipients of the new state pension could expect £234.45 a week, bringing it to £937.80 every four weeks, totaling £12,191.40 over the year financial year 2025/26.

Note that these are only projected figures based on current data. In addition, it is essential to recognize that any additional state pension and deferred state pensions are adjusted annually according to the Consumer Price Index (CPI) for September. The UK Government confirms annual growth in the Autumn Statement in November.

In response to the latest CPI inflation rate, Steven Cameron, director of pensions at Aegon, said: “Last week the launch of the Tory and Labor manifestos finally made a formal commitment to maintain the Triple Lock on state pensions for the next five years. As a result, state pensioners can have peace of mind knowing their state pension will continue to grow at the higher of price inflation, earnings growth or 2.5%.

“The Conservatives have gone further by committing to their new ‘Triple Lock Plus’, under which the personal allowance for state pensioners would also increase in line with the Triple Lock. This removes any possibility of state pensioners receiving the full New State. Pensions paying income tax on this.”