Inflation figures have hit a five-year high this September, which suggests the State Pension will rise by 3% in April 2018. This means the new flat rate State Pension payouts will increase from £159.55 to £164.34 a week, making pensioners nearly £250 better off.
September inflation rates play an important part as they’re are used by the Department for Work and Pensions to set how much pensioners receive from the start of the new tax year.
The State Pension is currently protected by the “triple lock”, which means payments rise by either 2.5%, the rate of inflation or average earnings growth, whichever is largest. As inflation is running above 2.5%, the lock will “bite” at 3pc. As a result, pensioners will receive an extra £248.56 a year.
The Chancellor, Philip Hammond, will need to confirm the increase in his Budget on 22nd November.