Millions receiving the State Pension could receive a ‘bumper’ rise yet again next year due to rising wages.
Due to the ‘triple lock’, experts are predicting the annual State Pension could increase by up to £879 in April, 2024.
This means pensioners would receive around £11,500 a year and the maximum flat rate State Pension would go from £203.85 per week to £220.55.
The current triple lock guarantee means the State Pension goes up each April by 2.5%, wage rate growth or inflation, whichever is highest.
The wage rate growth is currently 7.8% as of June this year and the highest of the three. It is based on the average earnings growth between May and July each year, so looks likely to be the deciding factor, if inflation continues to fall as experts predict.
The State Pension rise would come on top of a 10.1% rise last April.
Prime Minister Rishi Sunak has in the past week said he is committed to maintaining the triple lock and that seems unlikely to change in advance of an expected General Election in 2024, but the lock has been a political debating point for some time and nothing is ever certain in politics.
As we demonstrated in this column on August 2, remember that the State Pension alone is not enough for most people to ensure a ‘moderately comfortable’ standard of living in retirement.
Even for a ‘moderate’ standard of retirement living, with a car and one holiday abroad per year, retirees would need an annual income of £23,300, meaning they would have to find a further £12,700 on top of their State Pension.
The definition of a ‘comfortable’ standard would require £37,300 per year in total.
It has been mentioned several times, but it really is vital to ensure your pension provision is in order and that you plan ahead many years before retirement – you can never start too early, but it’s never too late either!
It is also vital to make sure your State Pension is up to date and that you will receive the maximum amount possible when you become eligible, which doesn’t need to coincide with your retirement.
Recent news coverage of comments from analysts at Hargreaves Lansdown suggested some 1.75 million Britons still receive a State Pension of less than £100 per week, most of them women.
People are being urged – and we concur – to check their State Pension forecast and if needs be, pay in the extra to make up for any deficit in their National Insurance contributions, which need to come to a full 35 years’ worth to qualify for the full pension amount. A minimum of 10 years’ worth is required to receive any State Pension.
You can easily check online via the government website at www.gov.uk/check-state-pension. Or call the government’s Future Pension Centre on 0800 731 0175 if you are below the age of 66 — or the Pension Service if you are above pension age on 0800 731 7898.
If you are considering establishing a private pension scheme, transferring a pension or want to look at your options for retirement, please do seek advice from an Independent Financial Adviser (IFA).
