finance

State pension payments to rise by £290 next April as inflation falls to 3.1%


INFLATION has decreased to 3.1% in September this year from 3.2% the month before, according to figures from the Office for National Statistics.

The inflation rate, announced today, October 20, is usually used to work out how much the state pension will rise by also.

Inflation fell from last month but the State pension will rise in April

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Inflation fell from last month but the State pension will rise in AprilCredit: Alamy

The DWP is yet to confirm but State pension payments will always rise by a minimum of 2.5% under the triple lock.

That’s despite the fact that inflation has gone down since last month.

The state pension is set to increase by 3.1% in 2022/23, in line with the inflation figures released this morning.

That means the basic state pension will go from £137.60 per week to £141.85 per week.

While the flat-rate state pension swill rise from £179.60 per week to £185.15 per week.

Tom Selby, head of retirement policy at AJ Bell, said: “The good news for retirees is the state pension is set to increase by 3.1% next year, boosting the incomes of those in receipt of the full flat-rate benefit by £5.55 a week.

“The basic state pension, meanwhile, is set to rise by £4.25 to £141.85 per week.

“However, the Government’s decision to suspend the earnings element of the state pension triple-lock means retirees will miss out on a blockbuster 8.3% increase.

“This decision will ‘cost’ someone in receipt of the full flat-rate state pension £9.35 a week in retirement income – or £486.20 over the course of the year.

“For savers, the decision to ditch the triple-lock was another reminder that the state pension, while valuable as a retirement income foundation, remains uncertain and subject to the whims of politicians.

“It is therefore crucial anyone wanting control over their retirement and a standard of living above the basic minimum covered by the state pension saves as much as they can as early as they can, taking advantage of matched contributions and tax relief and allowing compound growth to work its magic over the long-term.”

Overall the figures show that inflation has risen by 2.9% in the 12 months to September.

But the figure is 0.1% lower in September this year compared to the same period last year as in September 2021, the consumer prices index increased by 0.3% compared with a rise of 0.4% in September 2020.

The figure is also down from the 3% it rose in the 12 months to August previously recorded, by 0.1%.

The largest contribution to this came from the transport sector (0.91%), meanwhile housing and household services contributed 0.69%, restaurants and hotels, 0.34%, and recreation and culture, 0.31%.

Mike Hardie, head of prices at the ONS, said: “Annual inflation fell back a little in September due to the unwinding effect of last year’s ‘Eat Out to Help Out,’ which was a factor in pushing up the rate in August.

“However, this was partially offset by most other categories, including price rises for furniture and household goods and food prices falling more slowly than this time last year.

“The costs of goods produced by factories rose again, with metals and machinery showing a notable price rise. Road freight costs for UK businesses also continued to rise across the summer.”

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