Triple lock backstop to kick in for pensioners in 2021
With CPI at 0.5%, the state pension should rise by 2.5% from April.
21st October 2020 10:19
by Rebecca O'Connor from interactive investor
With CPI at 0.5%, the state pension should rise by 2.5% from April.
The Office for National Statistics this morning published September’s annual CPI 12-month rate inflation figure, which stands at 0.5%. This means the state pension should rise by 2.5% from next April, as this year, 2.5% is the highest measure within the important state “triple lock”, which dictates that the state pension rises by CPI, wage growth or 2.5%, whichever is the higher, every year.
Pensioners on the new state pension will see a rise of £4.40 a week to £179.60 and those on the old state pension will see a rise of £3.40 a week to £137.65.
Becky O’Connor, Head of Pensions & Savings at interactive investor, said: “The security of the 2.5% measure within the state triple lock is showing its worth and will help protect the income of millions of pensions from next year.
“But the fact that it has kicked in could mean there is a risk the Treasury decides to tinker with this valuable protection.
“Millions of people rely on the state pension to cover their living costs and it’s already arguably not generous enough.”
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