State pensioners are on track for a welcome boost to their finances next year as their payments increase could be more than double the inflation rate.
The latest inflation figures show the rate fell to 3.9 percent for the year to November. If inflation stays at these levels when the state pension increase happens next April, payments will go up by more than twice this figure, as they are set to go up 8.5 percent.
With the 8.5 percent increase in line with the triple lock, the full new state pension will go up from the current £203.85 a week to £221.20 a week, an increase of around £900 a year.
Steven Cameron, pensions director at Aegon, said: “If inflation remains at 3.9 percent until then [next April], state pensioners will receive an increase of more than double this amount, which could boost their purchasing power by over four percent after inflation.
“As always, the big question is whether the triple lock is sustainable long term. The state pension is very costly to fund but is a lifeline to millions.
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“We urge all political parties to make their intentions clear ahead of the next General Election. It could have a big influence over voting preferences.”
State pensioners on the full basic state pension will see their payments increase from £156.20 a week to £169.50 a week, an increase of almost £700 a year.
Commenting on the latest inflation figures, Grant Fitzner, chief economist at the Office for National Statistics (ONS), said: “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.
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“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year.
“Food prices also pulled down inflation, as they rose much more slowly than this time last year. There was also a price drop for a range of household goods and the cost of second-hand cars.”
Chancellor Jeremy Hunt said the latest figures show the UK is “back on the path to healthy, sustainable growth”.
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Experts have previously warned recent large increases to the state pension are making the triple lock ever more difficult to afford.
George Sweeney, pension and investing expert at finder.com, warned previously the state pension is becoming “increasingly more challenging and expensive”.
He explained: “Most people, young and old, are in favour of the triple lock, so I’m not surprised to see it staying.
“Jeremy Hunt doesn’t want to be the Chancellor to kick this hornets nest. However, considering the government already broke the ‘promise’ once, I think most people would rather have a sustainable system that’s stuck to for peace of mind. If you break a promise once, you can break it again.”
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