Granite guidance

Above inflation increase for state pensions

 Following the release of the September inflation figures the increases in the State Pension from April 2020 can be calculated  

The state pension and new state pension are increased each April by the “Triple Lock” which is the higher of:  

  • Annual CPI in from the September before the increase;
  • 3-month average wage growth to July before the increase; or
  • 2.5%.  

Average wage growth was 3.9% and CPI was 1.7% so state pension and new state pension will increase by 3.9% from April 2020.  

This means the full new state pension will see an increase from £168.60 to £175.20 per week and the full old basic state pension will see a rise from £129.20 to £134.25 per week.  

This is the second year where the wage growth has outstripped both CPI and the flat rate 2.5%, giving pensioners above inflation increases on the state pension payments.  

These figures still need to be confirmed by Government before being put into legislation. The calculation of wage growth isn’t defined in legislation, although the above figures are usually used. It is therefore possible different figure could be used.

 

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The general financial planning guidance provided in this website is based on our understanding of current law and HM Revenue & Customs practice, which are subject to change in the future. Whilst every effort is made to ensure the content of this website is correct, it does not constitute personal financial advice and Granite Financial Planning Ltd cannot accept any responsibility for it. There is a risk that investment returns may not achieve the desired result. Investments can go down as well as up. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk. Cookies are used on this website to record visitor numbers for analytics purposes.