People on a new state pension could owe up to £935 a month in extra payments

The Triple Lock measure is the mechanism used to determine how much the state pension will rise each year and the latest inflation rate could have a major impact on payments next year

The Office for National Statistics (ONS) has released new figures showing that UK inflation fell to its lowest level in almost three years in April(©2016Richard Sharrocks)

The Office for National Statistics (ONS) has released new figures showing that UK inflation fell to its lowest level in almost three years in April, while energy prices continued to fall. Consumer price index (CPI) inflation slowed to 2.3 percent in April, from 3.2 percent in March – the lowest level since July 2021, when inflation was recorded at 2 percent, which is the Bank of England’s target level .

Nearly 12.7 million state pensioners across Britain should start watching the CPI as it forms part of the Triple Lock measure that determines the annual increase in the premium benefit. Under the Triple Lock measure, state pensions rise each year in line with the highest value: average annual earnings growth from May to July, consumer price index (CPI) inflation in the year to September or 2.5 percent.

In April, the new state pensions and basic state pensions increased by 8.5 per cent, meaning someone on the full new state pension will receive £221.20, or £884.80 per four-week pay period during the 2024/25 financial year. Those receiving the full basic pension will receive £169.50 per week, or £678 per four-week pay period, the Daily Record reports.

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Steven Cameron, Pensions Director at Aegon, explains what the new inflation rate of 2.3 percent could mean for the future of the Triple Lock State Pension and how current measures could increase benefits by 5.7 percent in April.

He explained: ‘For the April 2024 increase, earnings growth in 2023 delivered an inflation-reducing increase of 8.5 percent. In April 2023, a spike in inflation from the previous year led to a record 10.1 percent increase in the state pension. These increases and the underlying high volatility present in both price inflation and earnings growth have since raised serious questions about the longer-term affordability of the state pension, which is paid for by today’s workers through national insurance contributions.

“With inflation now below 2.5 per cent, it is likely earnings growth that will determine next year’s Triple Lock increase, as the latest figures indicate it is at 5.7 per cent (for January to March 2024).”

“The specific figure used to determine the Triple Lock is the year-on-year increase in profits for the period ending May to July 2024, which will be published in September. Barring a significant decline in earnings growth in the coming months, this figure will likely determine next year’s Triple Lock.”

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