Inflation has now soared to 6.2% and is expected to go even higher as the prices of food and energy are rising even more quickly, leaving many older people struggling financially
State Pension payments have risen by 3.1% in line with the Consumer Price Index rate of inflation in September 2021, instead of the 8% boost that would have happened if the Triple Lock policy had not been suspended due to the increase in earnings, which was deemed to be unfairly inflated by the coronavirus pandemic.
The 3.1% increase means that the basic State Pension has now risen to £141.85 ($184.83) per week from £137.60 ($179.29) and the full new State Pension has gone up to £185.15 ($241.25) from £179.60 ($234.01).
State Pension currently provides essential financial support for over 12.4 million older people across the UK, including 981,399 retirees living in Scotland.
Inflation has now soared to 6.2% and is expected to go even higher as the prices of food and energy are rising even more quickly, leaving many older people struggling financially.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: Pensioners are bracing themselves for a tough time ahead as soaring inflation takes enormous bites out of their purchasing power. This year’s 3.1% increase in State Pension is no match for inflation that currently stands at 6.2% and is set to go even higher in the coming months.
Many pensioners will have other sources of income they can draw from but those largely, or wholly reliant on the State Pension will certainly struggle, especially as they spend a greater proportion of their income on the things that are rising steeply – energy and food, she said.
However, Helen pointed out that if high inflation sticks around for the rest of the year and then starts to fall back, older people could get a good increase next April, but that this is little comfort to those struggling now.
An increase of 8% next year would see those on the full, new State Pension receive £199.95 ($260.53) per week and those on the older, basic State Pension receive £153.20 ($199.62).
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.