State pension payment rates are likely to rise by 3.9 per cent in April 2027, according to the latest figures from the Office for National Statistics (ONS).
Thanks to the triple lock mechanism, state pension amounts increase annually in line with either the highest of inflation, average wage growth or 2.5 per cent.
ONS figures published earlier this morning have revealed that weekly wages grew by 3.9 per cent between May and July.
If the Labour Government continues to keep the triple lock in place following next month’s Budget, retirees should expect a 3.9 per cent uplift to their payments.
Pensioners will see their payments rise by 3.9% under the triple lock
|
GETTYThis would hike the full new state pension by around £9.40 a week, lifting payments from £241.30 to approximately £250.70 per week.
Heidi Karjalainen, an economist for the Institute of Fiscal Studies (IFS) and expert on pension policy, noted this is likely to be rate hike awarded to retirees next year.
She explained: “This is likely to be how much the state pension increases by next year, unless something very unusual happens with September consumer price index (CPI) inflation, which is currently expected to be below 3.9 per cent.
“This means the full new state pension is expected to reach £250.70 per week, or around £13,000 per year, in April 2027. Compared to this year that’s an increase of around £490 per year.”
Are you affected by state pension age changes? | GB NEWS
How much has the state pension risen by thanks to the triple lock? | GB NEWS/FIDELITY INTERNATIONAL
The final confirmation of the state pension rate hike will likely come during Chancellor John Healey’s Budget statement on October 28.
While praised for helping reduce pensioner poverty, analysts have criticised the triple lock for adding significantly to the growing benefits bill.
Forecasts from the Office for Budget Responsibility (OBR) indicate the payment uprate mechanism will likely be worth triple lock its expected cost by the end of the decade.
MPs and think tanks have called for an alternative way to implement state pension rate hikes to bring down Government spending.
Think tanks are calling for the state pension triple lock to be reviewed over ‘sustainability concerns’ | GETTY / OBR
Lily Megson-Harvey, policy director at My Pension Expert, said: “Many retirees are currently grappling with rising living costs and uncertainty about how long their savings need to last.
“Scrapping the triple lock without a clear alternative risks undermining confidence in retirement planning when certainty is needed most.
“People deserve confidence that the goalposts won’t keep moving as they approach retirement, giving them the certainty needed to plan for later life and make informed decisions about their financial future.
“The Government must work with the industry to focus on long-term sustainability and fairness, ensuring that retirees are protected.”