MILLIONS of retirees are on track for a pay rise of more than £700 next year.
Work and pensions secretary Therese Coffey has confirmed that the rise in the old age benefit will be governed by the triple lock in 2023.
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The calculation for the annual rise was temporarily suspended because of the pandemic and was reduced to a double lock.
The triple lock means the state pension rises each year according to the highest of three things: wage growth, inflation or 2.5%.
Wage growth was removed from the uprating because the coronavirus skewed wage data that would have given pensioners a bumper pay day.
Instead the state pension rates will rise by inflation of 3.1% in just a few weeks time.
The maximum new state pension amount will rise from £179.60 a week to £185.15 in April – an extra £289 a year.
Since the decision to pause the triple lock inflation has rocketed to 5.5% and is expected to rise further, leaving pensioners worse off.
But a bumper pay day is likely in the pipeline for next year instead as inflation is expected to hit 8% this year.
Ms Coffey made the commitment to honouring the triple lock for the remainder of Parliament when questioned by MPs in a House of Commons debate late last night.
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A rise of 8% would increase the maximum new state pension amount to £199.96 a week in 2023.
That’s £14.81 a week extra, or around £770 a year more, though the exact amount will depend on how much state pension you get.
A rise would also push up pension credit amounts for the most hard-up pensioners.
Steven Cameron, pensions director at Aegon, said the renewed commitment from the Government to the state pension triple lock will “offer some reassurance to state pensioners” after many were left “severely disappointed” by last year’s decision.
He said: “Looking ahead, there’s a good chance that state pensioners will be in for a bumper increase in April 2023.
“The Bank of England’s latest prediction is that inflation might reach 8% in the Spring and could be even higher later in the year.
“The April 2023 increase will include inflation till September 2022, which could then be near its peak of 8% or above.
“The triple lock will pay this, or even more if earnings growth is higher again.”
A bumper 8% or more increase in 2023 would be potentially the highest increase ever, compensating for the relatively low increase this April, he added.
Tough wait for retirees
But those living off the state pension face a tough wait until the benefit “catches up” to inflation next year.
Experts have urged the government to increase April’s benefit rise from the planned 3.1% to keep up with rising prices.
Chancellor Rishi Sunak is expected to announce further help for millions of struggling Brits in his Spring Statement on Wednesday, but is unlikely to go as far as increasing benefit rates.
Mr Sunak is expected to slash fuel duty to help millions of motorists cope with rising petrol and diesel prices.
Four in five households are already set for a £150 council tax rebate in April to help with rising energy bills.
Anyone struggling with higher bills or worried about debt can get help.
There are plenty of organisations where you can seek advice for free, including:
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