State pensioners set for £920 increase amid DWP calculation update

-Credit: (Image: Peter Kindersley)
-Credit: (Image: Peter Kindersley)


State pensioners could be in for a huge boost to their payments next April, potentially receiving twice the expected amount and increasing the full new state pension by £920. The average earnings figure used in the triple lock calculation was released this week, indicating a four percent increase to payments.

However, an expert has suggested that this figure could be revised upwards by large margin. Victoria Harris, co-founder of The Curve Platform, commented: "The potential revision of the earnings figure for the triple lock is a hot topic.

"While it's too early to pin down an exact number, we could be looking at an increase of around 7 to 8 percent based on current projections. This would be a significant boost for pensioners."

An eight percent increase would raise the full new state pension from the current £221.20 a week to £238.90 a week, an annual increase of £920.40 to £12,422.80. This would also mean the full new state pension would be just over £150 away from being subject to income tax, with the personal allowance currently at £12,570 a year.

A man checks his bills
The state pension could increase by £920 a year -Credit:Getty

Ms Harris highlighted another unknown factor - how the inflation figure could impact the triple lock calculation. She explained: "We must consider the broader economic implications. Inflation is the wild card here. If it continues to rise in the coming months, we might see even higher pension increases.

"This could be a double-edged sword - great for pensioners in the short term, but potentially challenging for the economy as a whole." If the 4% earnings figure announced this week is used, the full new state pension would rise from £221.20 a week to £230.05 a week, resulting in a £460 annual increase.

Another analyst has also put forward the view that the actual state pension increase may differ from the predicted 4% amount. Yiannis Zourmpanos, a financial consultant and senior contributor at Bountii, stated: "The Office for National Statistics (ONS) often revises its earnings data, which means the state pension increase you're expecting might not be the one you'll get.

"The ONS has a history of providing updated figures that more accurately reflect actual earnings growth over a given period. This means that by the time the final calculations are made, we could see a different percentage being used for the state pension uprating."

Regarding inflation, Mr. Zourmpanos cautioned: "While inflation was recorded at 2.2 percent in July, we're not out of the woods yet. Inflation tends to be unpredictable, and if it spikes before the key September data is released, it could outpace earnings growth.

"If that happens, inflation-not earnings-will determine the state pension increase for 2024. And given the rising costs of essentials like food, energy, and housing, inflation could indeed take the lead."