UK To Increase State Pension By 8.5% In 2024, Sticks With ‘Triple Lock’ Commitment

jeremy-hunt

The government will “honour its commitment” to the triple lock in full, according to Chancellor Jeremy Hunt, who announced that the new state pension will increase by 8.5% in April.

“There have been reports we would uprate [the triple lock] by a lower amount to smooth out the effect of high public sector bonuses in July,” stated Hunt in today’s (November 22) Autumn Statement. “But that would have been particularly difficult for 1 million pensions whose only income is from the state.”

“So instead, today we honour our commitment to the triple lock in full.”

The weekly state pension, referred to as the “new” pension, will rise from £203.85 to £221.20, or £11,502.40 annually.

The weekly payment for individuals who attained state pension age prior to April 6, 2016, known as the “old” state pension, will rise from £156.20 to £169.50 and £11,502.40 per year.

“This is one of the largest ever cash increases to the state pension, showing a conservative government will always back our pensioners,” Hunt said.

“Including today’s measures, our total commitment to easing cost of living pressures has risen to £104bn.”

Since it was implemented by a Conservative government in 2011, the triple lock, which raises the state pension by the greater of inflation, wage growth, or 2.5 percent, according to Hunt, has assisted in bringing 250,000 older people out of poverty.

“It’s been a lifeline for many during a period of high inflation,” he said.

Tom Selby, head of retirement policy at AJ Bell, said: “Retirees will receive an inflation-busting state pension increase next year after Jeremy Hunt confirmed the government’s ‘triple-lock’ pledge will be fully applied in April next year.

“With CPI inflation now at 4.6 per cent and anticipated to continue falling into 2024, today’s announcement represents a serious boost in spending power for millions of pensioners.”

Selby revealed there had been rumors the Treasury was thinking of using the 7.8% figure, which does not include bonuses, in place of the higher 7.8% figure, claiming NHS bonus payouts had inflate July’s earnings figure.

“This could have saved the Exchequer somewhere in the region of £1bn but would also have left the chancellor open to the accusation of shifting the state pension goalposts,” Selby said.

“Given where the Conservatives find themselves in the polls and the fact older people hold huge sway at the ballot box, it is hardly surprising they opted to target fiscal restraint elsewhere.”

There were rumours last month that the government might increase the triple lock by less because it might cost the Treasury £8 billion.

Additionally, earlier this month, a petition was started urging the government to fully implement the triple lock in April 2024.