Interactive Investor

Triple lock backstop to kick in for pensioners in 2021

21st October 2020 10:19

Rebecca O'Connor from interactive investor


Share on

With CPI at 0.5%, the state pension should rise by 2.5% from April.

The Office for National Statistics this morning published September’s annual CPI 12-month rate inflation figure, which stands at 0.5%. This means the state pension should rise by 2.5% from next April, as this year, 2.5% is the highest measure within the important state triple lock, which dictates that the state pension rises by CPI, wage growth or 2.5%, whichever is the higher, every year.

Pensioners on the new state pension will see a rise of £4.40 a week to £179.60 and those on the old state pension will see a rise of £3.40 a week to £137.65.

Becky O’Connor, Head of Pensions & Savings at interactive investor, said: “The security of the 2.5% measure within the state triple lock is showing its worth and will help protect the income of millions of pensions from next year.

“But the fact that it has kicked in could mean there is a risk the Treasury decides to tinker with this valuable protection.

“Millions of people rely on the state pension to cover their living costs and it’s already arguably not generous enough.” 

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox

Sign up for a free research account to get the latest news and discussion, and create your own virtual portfolio.

Free Sign Up