State pension set to increase by over £400

The UK government is set to boost the state pension by more than £400 annually, according to recent reports, this sparks anticipation and controversy among pensioners

The increase, which is expected to be formally announced next month ahead of the Budget, is a result of the “triple lock” mechanism, reported the BBC.

This system guarantees that the state pension rises each April by the highest of three measures: inflation, average wage growth, or a minimum of 2.5%.

This year, wage growth figures are set to dictate the increase, with official numbers slated for release next week.

What to expect from the state pension increase

For those receiving the full state pension, this adjustment could mean an extra £400 per year.

Currently, the full state pension stands at around £12,000 annually, following a significant £900 increase implemented last year.

Retirees who qualified for the secondary state pension before 2016 could see a boost of approximately £300 annually, pushing their total state pension to £9,000 next year under the old system.

The triple lock mechanism

The government is facing backlash over its recent decision to cut the winter fuel payment for the majority of pensioners. This move, expected to reduce incomes by £100 to £200 for millions of pensioners, has drawn criticism from campaigners and opposition parties, who argue that it will disproportionately affect those living below the poverty line, particularly in rural areas.

The triple lock mechanism itself has been a contentious issue since its introduction in 2010 by the Conservative-Liberal Democrat coalition.

Designed to protect the purchasing power of pensioners relative to living costs and wage growth, it has become a central piece of the UK’s pension policy landscape.

The final decision on the exact uprating of the state pension will be made by Pensions Secretary Liz Kendall, pending the release of wage growth figures and other economic indicators. This decision is eagerly anticipated by pensioners and will undoubtedly influence household budgets across the country.

As discussions continue surrounding the implications of these pension adjustments, the government remains under scrutiny for balancing financial responsibility with the welfare of elderly citizens.