State pension to increase by 3.1% next April giving some retirees an extra £5.55/wk
More than 10 million pensioners could see their state pension rise by £5.55/wk from April 2022 after the Office for National Statistics (ONS) confirmed that inflation stood at 3.1% in the year to September - a figure that is typically used to calculate the following year's state pension increase.
Update: 25 November 2021: The Department for Work and Pensions has today confirmed that the state pension will rise in line with September's Consumer Prices Index measure of inflation, of 3.1%, next April.
In recent years, increases to the state pension have been based on the so-called 'triple lock', which guarantees payments will rise in line with the larger of either September's Consumer Prices Index (CPI) measure of inflation as announced in October, wage growth, or 2.5%.
However, it was announced earlier this year that the triple lock will be suspended next April following a sharp increase in earnings after the Covid-19 pandemic. Instead, payments will now be based on the double lock of 2.5% or inflation. But given inflation was confirmed as 3.1% today (down from 3.2% last month) it's likely this is how much pensions will rise by next year - although the Government has yet to confirm this.
An announcement is expected later this year. See our State Pension guide for more info on what you could be entitled to.
The temporary double lock ignores wage growth
|Triple lock||Inflation (September's CPI), wage growth or 2.5%|
Both new state pensions and basic rate pensions could see annual rises in excess of £200
Pensioners receiving the basic state pension, who reached state pension age before April 2016, could see their annual income rise by £221. Those entitled to the new single-tier state pension could be up to £288.60/yr better off.
Assuming the 3.1% increase is confirmed, here's how the state pension will increase for those on the new state pension:
|Increase||+ £5.55||+ £288.60|
And again, assuming the 3.1% increase is confirmed, here's how the state pension will increase for those on the old basic state pension:
|Increase||+ £4.25||+ £221|