Sticky inflation may cause state pension to increase by a sizable amount in 2024, giving pensioners a big income boost, according to Broadstone.
Those receiving a full state pension will now earn £10,600 year as the government kept its triple lock commitment by raising the state pension by 10.1 per cent for the 2023–24 fiscal year, an increase of around £1,000 from the year before (2022–23).
Inflation, however, is proving to be more enduring than anticipated, which could result in a second straight ‘jumbo hike’ in the state pension says Broadstone.
The state pension would increase by £848 to £11,448 annually assuming CPI remains at its current level of 8 per cent. The benefit would rise by £636 even if inflation decreases to 6 per cent.
Broadstone head of DC workplace savings Damon Hopkins says: “Inflation is hammering household budgets, and as we’ve just seen from yesterday’s numbers, there doesn’t seem to be any immediate respite.
“While workers may look to their employer for wages to keep pace with inflation, retirees could be set for yet another significant boost to the State Pension.
“Having benefitted from around a £1,000 increase to their state pension last year, another substantial triple-lock hike will further embed its importance to the retirement income of millions of pensioners – present and future.
“Given the delicate state of the government’s finances it will raise further questions around the viability of the triple-lock. That said, it would take a brave Prime Minister to break a key manifesto pledge for the second time in three years so close to a General Election.”
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