State pension could increase by up to £230 a year with 2.5% boost set to come

The state pension could increase by up to £230 a year, it has been revealed.

Earlier this month, the state pension age rose to 66 for millions of Brits in the UK.

Now a 2.5% increase is likely to come into play if September inflation figures remain low.

The numbers will be revealed this week which could see the income rise by at least 2.5% each year.

Its calculation is based on whichever is higher out of consumer prices index (CPI) inflation, earnings growth or 2.5%.

The government looks at inflation in September and average earnings in the three months to July to determine the pension wages.

Experts have predicted the CPI in September will increase slightly with figures set to be released on Wednesday (October 21).

And if the estimation is accurate, inflation would still be far off the government target of 2%.

Average earnings were down 1% for the three months to July, meaning the triple lock guarantee is likely to come into force.

This would mark the fourth time the 2.5% triple lock has kicked in since the policy was brought in back in 2011.

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Tom Selby, senior analyst at AJ Bell, said: "With Covid-19 hammering wages and pushing inflation to almost 0%, the value of the state pension triple-lock has never been clearer.

"If it were not for the policy, pensioners would likely see their state pension frozen next year.

"As it is, retirees are set to benefit from a 2.5% state pension boost in 2021/22, adding £3.40 a week to the value of the 'old' basic-rate state pension and £4.40 a week to the 'new' state pension."

The full new state pension is £175.20 per week, while the previous was £134.25 per week.

If the increase comes into force, the new state pension will rise by £4.40 a week to £179.60, making it a total of £228.80 over the year.

Meanwhile, the old basic state pension will increase by £3.40 a week to £137.65, giving pensioners an extra £176.80 over 12 months.

The news comes after state pension changes were announced at the start of the month.

Brits now have to wait until they are 66 to retire in the UK.

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