UK state pension to increase by 3.1% next year

The UK state pension is set to increase by 3.1% in 2022/23, in line with September’s Consumer Prices Index (CPI) inflation figure published today by the Office for National Statistics (ONS).

This means the basic state pension is set to rise by £4.25, from £137.60 per week to £141.85 per week, while the flat-rate state pension is set to rise by £5.55, from £179.60 per week to £185.15 per week.

The latest latest ONS data shows UK inflation (CPI) grew by 3.1% in September 2021, a figure that results in a number of state benefits being uprated annually in line with this figure, including the state pension.

However, had the government chosen to retain the earnings element of the triple-lock based on wage growth, the state pension could have increased by 8.3% next year. This would have instead increased the basic state pension to £149 per week, and the flat-rate state pension to £194.50 per week. The Treasury is calculated to save around £4.5bn as a result.

Investment platform, AJ Bell, suggested the decision to suspend the earnings element of the triple-lock for 2022/23 will therefore “cost” retirees in receipt of the full flat-rate state pension £9.35 per week.

“The government’s decision to suspend the earnings element of the state pension triple-lock means retirees will miss out on a blockbuster 8.3% increase,” said AJ Bell head of retirement policy, Tom Selby. “This decision will ‘cost’ someone in receipt of the full flat-rate state pension £9.35 a week in retirement income – or £486.20 over the course of the year.

“Each one percentage point increase in the state pension costs the Exchequer an estimated £900m, meaning the Treasury is likely to save around £4.5bn as a result of the move. For savers, the decision to ditch the triple-lock was another reminder that the state pension, while valuable as a retirement income foundation, remains uncertain and subject to the whims of politicians.

“Both the amount you receive and the age you receive it has been subject to significant reform over the last decade. It is therefore crucial anyone wanting control over their retirement and a standard of living above the basic minimum covered by the state pension saves as much as they can as early as they can, taking advantage of matched contributions and tax relief and allowing compound growth to work its magic over the long-term.”

    Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.

Air and the role of later-life lending
Content editor at MoneyAge, Dan McGrath, spoke to the chief executive officer at Air, Will Hale, about the later-life lending industry, the importance of tailored advice and how technology and obligations have shaped the sector.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.