Pensioners could see their payments increase by £750

STATE pensioners could see their payments boosted by almost £750 a year due to inflation remaining high.

The Bank of England has predicted that rates of inflation will not come down as quickly as previously thought, which will provide a much-needed boost to pensioners.

This is due to triple lock pensions, a government commitment to raise the value of the state pension every tax year by the highest of three different factors – either the previous September’s inflation, average wage growth, or 2.5 per cent.

This year, pensions increased by 10.1 per cent, which was in line with last September’s inflation rate. This is the biggest increase in pensions on record. Now, with inflation expected to remain high, retirees can expect another bumper increase to their pension next April.

The Bank of England recently predicted that inflation would fall to 7 per cent in the third quarter, which covers September.

This would result in an increase from £203.85 to £218.15 a week for those on the new state pension, which is equivalent to an extra £743.60 a year, bringing the new full entitlement to £11,343.80.

Those on the old state pension, paid to those who reached the pension age before 2016, will see a boost of £569.40 a year – up from £156.20 to £167.15 a week.

This will be good news for pensioners, with the rate of inflation set to fall to 5.1 per cent at the end of this year, according to the Bank, and will help those being hit hard by the cost of living crisis.

This also follows two years of financial difficulty for pensioners where their pension increase was lower than the inflation rate at the time.