The state pension could rise by around 4.3% next April, with average earnings currently expected to be the highest of the three measures used under the triple lock. If forecasts prove accurate, those receiving the full new state pension would see payments rise by about £10.30 a week, taking the total to roughly £251.60 a week, or £13,086 a year – an annual increase of about £540.
Triple lock pledge
The triple lock guarantees that the state pension increases each year by whichever is highest: average wage growth, inflation or 2.5%. Andy Burnham has previously pledged to keep the triple lock in place, saying the commitment should stand despite ongoing debate over whether the policy remains affordable in the long term.
However, pension experts believe there is another step that could help ease the financial burden facing both retirees and the wider pensions system.
Focus on older workers
The Pensions Commission, in its interim report, said helping more people stay in work for longer – particularly those in their 50s – should be a key priority. It argued that reducing economic inactivity among older workers would give more people the chance to build bigger pension pots before retiring, improving incomes later in life.
The commission also warned that around 15 million people are currently not saving enough for retirement. It said lower-income households and self-employed workers are among those most likely to face financial hardship in later life because they are not on track to achieve an adequate retirement income.
Importance of state pension
Research from Pensions UK has highlighted the importance of the state pension, finding it can be the difference between reaching a minimum standard of living in retirement and falling into poverty for many older people.
While the triple lock remains popular with pensioners, some organisations have argued it should eventually be replaced. The Resolution Foundation has previously called for the policy to be scrapped, saying a different approach could provide a fairer and more sustainable way of increasing state pensions over the long term.
