The state pension is forecast to rise by more than 17% over two years, driven by high inflation.
Every year, the state pension increases in April by either 2.5% or in line with the rise in average earnings or inflation, known as the ‘triple lock.’
As September’s inflation figures are often used to determine state pension increases, the state pension rose 10.1% to £203.85 (around £10,600 a year) in April 2023 as inflation ran high.
Inflation is expected to fall to 7% in September – still higher than the Bank of England’s (BoE) 2% target - so the state pension could rise by £742 to £11,342 a year next April.
In this scenario, the state pension will have soared by over 17% between April 2022 and April 2024.
However, inflation is proving difficult to forecast, falling slower than expected this year.
Huw Pill, chief economist at the BoE, has recently revealed its forecasting model has become ‘unworkable’ during the inflation crisis as it failed to fully assess the impact of the Ukraine war on prices and wages.
