triple lock mechanism<\/a>.<\/p>\nThe inflation figure used by the Government is September\u2019s consumer prices index (CPI) measurement. <\/p>\n
The Bank\u2019s forecast suggests inflation will peak then at 4 per cent.<\/p>\n
But the state pension could still rise by far more than this, as the Office for Budget Responsibility (OBR), the Government\u2019s Budget Watchdog, forecasts that average earnings growth in the year to May and July \u2013 the relevant figure for the triple lock \u2013 will be 4.6 per cent.<\/p>\n
This would trump the 4 per cent CPI figure and give pensioners an inflation-busting pension rise.<\/p>\n
Laith Khalaf, head of investment analysis at AJ Bell, said: \u201cPensioners have something to cheer in the latest set of forecasts from the Bank of England, which predict inflation will peak at 4 per cent in September. <\/p>\n
\u201cThat\u2019s a favourably timed spike for the calculation of next year\u2019s state pension, which takes the September CPI reading as one of the inputs of the triple lock.<\/p>\n
\u201cIt\u2019s possible that wage growth may trump inflation, and pensioners get an even bigger bump in their income. But if the Bank of England is right about inflation, then pensioners can look forward to a rise of at least 4 per cent in their state pension next year.\u201d<\/p>\n
What could the state pension rise to?<\/p>\n
Below shows what the new and basic state pensions could rise to under various scenarios \u2013 though the figures only apply to those who get the full amounts.<\/p>\n
These are \u00a3176.45 per week for the basic state and \u00a3230.25 per week for the new state pension.<\/p>\n
Women born before 6 April 1953 and men born before 6 April 1951 get the basic state pension, while those born after get the new state pension.<\/p>\n
Inflation \u2013 If inflation were to sit at 4 per cent in September, and this was the highest of the three factors, the basic state pension would rise to \u00a3183.50 and the full state pension to \u00a3239.45 per week.<\/p>\n
Average earnings \u2013 If average earnings were to sit at 4.6 per cent this summer, and this was the highest of the three factors, the basic state pension would rise to \u00a3184.55 and the full state pension to \u00a3240.85.<\/p>\n
2.5 per cent \u2013 This part of the lock will almost certainly not apply this year, given inflation and average earnings are far above 2.5 per cent, but theoretically, if it were used, the basic state pension would rise to \u00a3180.85 and the full state pension to \u00a3236.00<\/p>\n","protected":false},"excerpt":{"rendered":"The state pension rises every April, with the triple lock mechanism determining the amount New information on how…\n","protected":false},"author":2,"featured_media":52761,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,4176,4174,4175,2221,8183,56,54,55],"class_list":["post-52760","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-personal-finance","tag-personalfinance","tag-state-pension","tag-triple-lock","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/52760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=52760"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/52760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/52761"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=52760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=52760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=52760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}