State pension could increase by £517 next year

Millions of pensioners could be better off next year as state pensions look to rise by £517 under the triple lock.

While we don’t know yet how much the state pension could rise by next April, the annual growth figures – released on 13 August – are a good indicator of how much extra you could get.

What is the triple lock?

The triple lock is a guarantee that state pensions won’t be overtaken by an increase in the cost of living or working people’s income.

It means both the basic (pre-April 2016) and new state pensions (post-April 2016) increase every April in line with the highest of the following:

• inflation, as measured by CPI in the previous September
• the average wage increase
• 2.5%

The triple lock was introduced in 2010 by the coalition government. Labour have confirmed it’ll stay in place.

What does this mean for your pension?

Figures by the Office for National Statistics (ONS) show annual growth in total earnings, including bonuses, stood at 4.5% in June – the highest of the three measures the triple lock considers as inflation sat at 2% during the same month. 

If wage growth remains at a similar level, pensioners could pocket an extra £517 in 2025. If you get the new state pension, your weekly payments will go up by £9.95 a week. You’ll get an extra £7.63 each week if you’re on the basic state pension.

Anyone who turned 66 on or after 6 April 2016 receives the new state pension. Anyone born before this time will be on the basic pension.

The likely increase is a small but welcome relief after millions found out they won’t be getting a winter fuel payment this year.

Households will still need to wait until next month before finding out how much their state pension will increase by next April.

What other financial help is available for pensioners?

If you claim state pension and have a low income, you might be entitled to pension credit.

Pension credit is a separate payment and can be claimed even if you have other income, savings or own your own home. Last year, up to £1.7bn of available pension credit went unclaimed – around £1,900 per year for each eligible household who didn’t claim it.

Claiming pension credit can also open a door to other support, such as council tax discounts and a free TV licence, so it’s worth seeing if you can get it. Use our free benefits calculator to see if you’re missing out on support you’re entitled to, or apply for pension credit online here.