New PM Andy Burnham is just weeks away from his first Budget with his new Chancellor too.
Andy Burnham is set to hand new state pensioners a bumper monthly payment (Image: Getty)
State pensioners are set for another bumper increase to their earnings after new Prime Minister Andy Burnham promised to back the state pension triple lock, despite increasing concerns over how it will be funded in future.
But Mr Burnham and his new Chancellor John Healey are already inheriting a state pension system which is paying up to £1,045.63 a month to new, post-2016 retirees.
The full new state pension is currently £241.30 per week for those who hit state pension age after April 6, 2016. The state pension isn’t actually paid monthly, it’s paid every four weeks. Averaging out the pension across a year, it works out at £1,045.63 per month for a new state pensioner with a full National Insurance record.
Thanks to the Triple Lock, state pensions have risen by far more than inflation too, linked to wage growth. The Triple Lock states that pensions must rise by one of three metrics: wage growth, inflation or a flat 2.5%, whichever is highest. Wage growth was highest this year, at 4.8%, so pensions increased in line with that in April.
The old basic state pension, for those who retired before 2016, increased by the same percentage, but went from £176.45 per week to £184.90 per week.
And next year, with Andy Burnham promising to maintain the triple lock in the upcoming Budget, state pensioners will automatically get at least another 2.5% increase to the DWP payments.
Earlier this month, Andy Burnham has said it is “important” to continue the Labour manifesto commitment to maintain the triple lock on the state pension.
Reddit user Masam10 asked in an online Q and A: “Is it time to abolish the triple lock? Or at least have that discussion?”
The Makerfield MP replied: “I appreciate there’s a lot of debate about this but it is important that the commitment in the manifesto stands.”
Currently, the basic state pension, for those who hit state pension age before 2016, is worth £9,614.80. It means that even if the triple lock only rises by the statutory minimum 2.5%, it will hand older state pensioners an extra £240.37 per year on their basic state pension payments, if they have a full National Insurance record, not including any additional uplifts such as Second State Pension.
For those who hit state pension age after April 2016, so would be aged 77 or under by next April due to the state pension age of 63 to 65 in 2016, the state pension is currently worth £12,547.60 per year. A minimum floor 2.5% rise on this would be worth £313.69 for these ‘new state pensioners’ who have a full National Insurance record, taking their payments to £12,861.29 for the year.
Averaged out across a year, it means payments would be £1,071.75 per month, but the final figure could be even higher if one of the other two triple lock elements is higher than 2.5%.