Retirees will find out how much the state pension will increase by next week – here's what to expect

RETIREES will find out how much their state pension will increase by next week, with a rise of at least 2.5% guaranteed.

The UK inflation rate, which will be announced on October 20, is used to work out how much the state pension will jump by.

Pensioners will have to wait until next Wednesday to find out how much their payments will rise by in April.

State pension payments will always rise by a minimum of 2.5% under the triple lock, even as it's paused, but if inflation is higher it will rise by that amount.

The government scrapped the triple lock earlier this year, removing earnings as a measure to determine the pension.

That means that the state pension will rise at the rate of inflation or 2.5% – whichever is highest.

The latest available inflation figures revealed it surged 3.2% in August – the highest it has been since March 2012 and the biggest jump since records began back in 1997.

If the state pension were judged on that it would add £5.75 a week to payments of the new state pension.

But the Bank of England has predicted it could rise to as much as 4% this year.

The triple lock was scrapped this year as earnings growth is expected to be unusually high at around 8.8% because of the pandemic.

This would have given pensioners a bumper pay rise of £700 a year.

How much will the state pension rise by?

The current new state pension is currently worth a maximum of £179.60 a week, or around £9,339 a year.

A rise of 4% would add an extra £7.18 a week to the payment, increasing it to £186.78 a week.

Over the year that's £9,713, and an extra £373.

Who can claim the state pension?

Men born on or after April 6, 1951, and women born on or after April 6, 1953, will be able to claim the new state pension.

How much you get depends on how many years of National Insurance contributions you have.

You need a minimum of 10 "qualifying" years to get anything at all and 35 will get you the maximum amount.

Those who reached the state pension age before April 6, 2016, get the old state pension, known as the basic state pension.

Those getting their pension through the old system may also get a top-up from the additional state pension, depending on circumstances.

We pay for your stories!

Do you have a story for The Sun Online Money team?

Email us at [email protected]

    Source: Read Full Article