Rolling coverage of the latest economic and financial news, as wage growth – used to set triple-lock pension – slows to 3.9%
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, is also expecting the state pension to rise by 3.9% next year under the triple-lock system.
Morrissey explains:
“Pensioners stand to be almost £490 better off next year as today’s earnings figures have a huge impact on next year’s state pension. The data, alongside September’s inflation figure and 2.5%, is a key component of the triple lock formula used to increase state pensions. With CPI inflation currently sitting at 2.9% it seems increasingly likely that today’s 3.9% increase in average earnings will be the figure used.
This would put someone on the full new state pension on course to receive £250.70 per week from next April – up from the current £241.30 per week. Someone on a full basic state pension would receive £192.10 per week – up from £184.90.
“Today’s earnings figures show wage growth running at 3.9%, which puts a State Pension increase of a similar magnitude firmly on the cards next April under the triple lock.
“If confirmed, this would see the full New State Pension rise to over £13,000. While we will need to wait for September’s inflation figure before the uprating mechanism is formally confirmed, inflation is currently expected to remain below earnings growth, making an earnings-led increase the most likely outcome.
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