Earlier this year, the Department for Work and Pensions (DWP) confirmed that the temporary suspension of the Triple Lock rule will be removed for next year’s State Pension uprating in April. The Triple Lock rule ensures that State Pension increases each year in line with whichever is highest of inflation as measured by the Consumer Prices Index (CPI) in the previous September, average earnings, or 2.5%.
However, the average earnings benchmark was suspended for the 2022/23 financial year due to the economic fallout from the Coronavirus pandemic. This resulted in payments for the New and Old Basic State Pension increasing by 3.1% when the inflation figure for September 2021 was 9%.
On the BBC Sunday Morning programme this week, Work and Pensions Secretary, Dr Therese Coffey MP, defended plans to increase the State Pension in line with inflation while public sector workers are likely to face real-terms cuts. This means older people could see their current weekly payment increase by 10%, based on current inflation figures.
Dr Coffey said: “We are going back to our policy of the Triple Lock, we suspended it for one year because freakish statistics would have given pensioners a particularly odd earnings relation in terms of rises.
“I formally have to make a decision in the autumn so I can’t predict that but do recognise the average income of pensioners is very low.
“So potentially a 10% rise or matching inflation, whatever the appropriate rate would be at the time would be, I think, a measured approach recognising that their opportunity for people to earn more income is very limited, if possible at all.”
State Pension payments with 10% uprating 2023/24
An increase of 10% could potentially see older people receive a weekly increase of up to £18.51, which would be an extra £74.10 per four-weekly pay period - based on UK Government rounding policy.
The following calculations are estimates based on DWP recent comments about a 10% increase.
New State Pension
- Weekly: This could increase from the current rate of £185.15 per week to around £203.70
- Per 4-weekly pay period: From £740.60 to around £814.80
Old Basic State Pension
- Weekly: This could increase from the current rate of £141.85 per week to around £156.05
- Per 4-weekly pay period: From £567.40 to around £624.20
People receiving State Pension can choose to be paid either weekly or every four weeks - not to be confused with being paid monthly as the DWP makes 13, four-weekly payments each year over a 52-week period which can result in two payments being made in the same calendar month.
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