Exact amount state pension set to rise by next April as crucial inflation figure confirmed

The looks set to rise by more than £470 after the latest was confirmed this morning.

The triple lock guarantees the state pension rises each April by the highest out of inflation (using the previous September inflation figure), wages (average growth between May and July) or 2.5% - whichever is highest. It was announced today that inflation for September had fallen to 1.7% - which means wage growth will be used to determine the state pension increase.

Wage growth was revised this week to 4.1% - up slightly from the previous estimate of 4%. The state pension increase will be confirmed by Chancellor in her on October 30. Former pensions minister Sir Steve Webb, now partner at LCP, said the higher wage growth figure of 0.1% from the initial estimate adds around £100million to the state pension bill under the triple lock formula.

He said: “A slightly higher rate of increase is welcome for pensioners, though will be an unwelcome £100million extra cost for the Chancellor as she prepares her . The rate of the new state pension will now be close to £12,000 per year, very near to the £12,570 tax-free personal allowance. This is likely to put extra pressure on the Chancellor to take action on tax allowances in the coming years.”

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There are two different types of state pension and which one you claim depends on when you were born. You'll claim the new state pension if you're a man born on or after April 6, 1951, or if you're a woman born on or after April 6, 1953. The full new state pension is worth £221.20 a week, or £11,502 a year, but this would rise to £230.30 a week, or £11,975 a year, under a 4.1% increase. You claim the older basic state pension if you’re a man born before April 6, 1951, or a woman born before April 6, 1953.

The full basic state pension is worth £169.50 a week, or £8,814 a year, but this would rise to £176.45 a week, or £9,175 a year, under a 4.1% increase. However, many pensioners face paying more tax next year as the full new state pension edges closer to the current £12,570 tax-free personal allowance. The exact amount you get for your state pension depends on your National Insurance record. For the new state pension, most people need 35 qualifying years on their National Insurance record to get the full amount. You normally ten years to get anything at all.

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