State pension increase – what rates might you expect in April 2023? | Personal Finance | Finance

Every year, the UK state pension sees an increase, termed the triple lock, to ensure it doesn’t lose value due to inflation. There was a temporary removal of the triple lock at the start of the year following an abnormal rise in wage inflation during the pandemic, but as news comes that it’ll be reinstated next year, here are the rates you could expect.

To work out the annual triple lock increase, the highest percentage out of the following three is added to the existing figure:

• Inflation – Typically the Consumer Prices Index (CPI) inflation in the year to the previous September
• Wages – The rise in average weekly earnings in the year to the May-July period the previous year
• 2.5 percent – If this set figure is higher than either inflation or wages

This year, it’s likely to be inflation as it’s currently nearing double digits after being recorded at a 40-year high of 9.4 percent as of June – and the Bank of England is only forecasting this to increase.

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In its August forecast, the bank projected inflation to rise to around the 10 percent mark for September, before jumping a further 13 percent in October.

The official date for an announcement on the exact state pension rates is yet to be confirmed, as this will likely happen towards the end of November 2022.

However, as it uses a similar formula every year, it will use September’s inflation figure to work out the increase, and this is due to be published on Wednesday, October 9.

The next rise in the State Pension will take place in April 2023, so what payment could you be seeing next year?

Winter Fuel Payment – this is a one-off tax-free sum to help cover fuel costs over the winter months to those born on or before 25 September 1956.

Cold Weather Payment – if the average temperature in your area is recorded as, or forecast to be 0C or below for seven consecutive days, you may be able to receive additional payments for your fuel bills if you receive certain benefits, including Pension Credit.

Warm Home Discount – you might be able to get £150 off your electricity bill or £150 added to your prepayment meter if your electricity supplier is part of the Warm Home Discount scheme, and you or your partner receive the Guarantee Credit portion of Pension Credit.

For more information on the grants available, click here.