State pensioners told payments could be hiked to £1,001 a month

State Pensions are expected to rise to more than £1,000 a month, experts have predicted. Steven Cameron, Pensions Director at Aegon, has explained that the triple lock could push payments up by as much as 5.7 per cent next April as the Cost of Living crisis continues.

Steven said: "The specific figure used for determining the triple lock will be the year-on-year increase in earnings for the period ending May to July 2024, which will be published in September. Barring a significant drop in earnings growth over the next few months, this figure will likely determine next year's triple lock."

The State Pension increases in April each year, based on a system known as the triple lock. This just means the increase matches one of three percentages, with the government choosing the highest number: how much general costs have risen by (inflation), based on September's Consumer Price Index (CPI), the average increase in wages between May and July, or 2.5%.

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The triple lock is currently set to be determined by the earnings growth element, which stands at 5.7%. Steven continued: "If price inflation stays low and earnings growth also gradually falls back to levels more typical of the last decade, then the State Pension triple lock formula may produce more predictable and affordable increases."

"This will make it less costly for the next Government to commit to maintain it for a further 5 years. We may see lower rates of increases, but in times of lower inflation, the State Pension doesn't need to increase by as much to allow pensioners to maintain living standards."

"However, rather than a three-way comparison year on year, we'd recommend averaging the earnings component over a three-year period, which could smooth out excessive volatility and help ensure intergenerational fairness."

The full State Pension could rise to an eye-watering £1001 a month based on a new 5.7 per cent uplift to £233 weekly, while the full Basic amount will rise to £178 a week or £773 per month.