State pensions could rise 10.1% from April as Prime Minister 'committed' to the triple lock - though no certainty over benefits rise
The Prime Minister today (19 October) said she was "completely committed" to the triple lock, meaning millions of people claiming the state pension could receive a 10.1% increase in payments from April. However, given the ongoing cost of living crisis and economic uncertainty the Government has yet to officially confirm whether this will be the case, or whether benefits will rise by the same amount.
Update: 25 October 2022: Rishi Sunak has today been appointed Prime Minister and leader of the Conservative party following Liz Truss's resignation. It's therefore unclear whether commitments to the pensions triple lock will now be met. We will update this story when we know more.
Usually pension and benefit payments would be uprated by the Consumer Prices Index (CPI) rate of inflation for the year to September. This rate was 10.1% as published by the Office for National Statistics today.
Liz Truss made the commitment during Prime Minister's Questions on Wednesday. It would see state payment pensions rise in line with inflation from next April. However, there was no such commitment for benefits payments.
If you're struggling with rising costs, see our Cost of Living Help hub for useful information and handy tools and calculators.
How inflation could boost state pension payments from next April
More than 12 million pensioners could see their state pension increase by £18.70 a week from April next year if the Government reintroduces the 'triple lock'.
Since 2010, increases to the state pension have been based on this 'triple lock' commitment, which guarantees that payments rise in line with the larger of either September's Consumer Prices Index (CPI) measure of inflation, average wage growth, or 2.5%.
Last year, the triple lock was suspended due to an "irregular statistical spike" in average earnings growth caused by workers coming off furlough and pandemic-related restrictions easing, with the increase instead based on the higher of 2.5% or CPI inflation - known as the 'double lock'.
The Government had said it would return to the triple lock for next year - and today Liz Truss affirmed her commitment to it during Prime Minister's Questions. We've asked the Treasury for confirmation that pensions will be uprated by 10.1% in line with inflation, and will update this story if we hear back.
If the triple lock does return, pensioners receiving the basic state pension, who reached state pension age before April 2016, could see their annual income rise by £745. Those entitled to the new state pension (for those who reached state pension age from April 2016) could be better off by up to £972 a year.
Assuming the 10.1% rise is confirmed, here's how the state pension will increase:
|Increase||+ £18.70||+ £975.75|
And similarly, assuming the 10.1% increase is confirmed, here's how the state pension will increase for those on the old basic state pension:
|Increase||+ £14.33||+ £747.71|
Which benefit payments could also rise by inflation from April 2023?
Usually inflation-linked benefits and tax credits rise in April directly in line with the the previous September's CPI.
Again, these rises need to be confirmed by the Government before being implemented. And while the Prime Minister affirmed her commitment to raising state pension payments in line with inflation next year during Prime Minister's Questions today (19 October), she didn't commit to doing the same for benefit payments when that question was asked.
If benefits are uprated in line with inflation, the benefits that could see an 10.1% increase include:
- Attendance allowance
- Employment and support allowance (ESA)
- Housing benefits
- Income support
- Industrial injuries disablement benefit
- Jobseeker's allowance (JSA)
- Maternity allowance
- Pension credit
- Person independence payment (PIP)
- Statutory maternity / paternity / adoption / shared parental pay
- Statutory sick pay
- Tax credits
- Universal credit (UC)
The amount that can be taken off benefits payments in the form of deductions or sanctions could also increase. The amount that can be deducted currently varies by benefit.
The amount you can reclaim for childcare costs if you get universal credit, and the overall benefits cap (the maximum amount you can get in benefits), don't usually rise with inflation. These go through a separate review process, and have stayed at the same level for the past few years.
For more information on how benefits work, head to our full Benefits Check guide. You can also use our 10-minute calculator, which will show you what you might qualify for and how much you could get.