Millions of pensioners will be receiving a boost to their pensions, by April of 2016, due to rise of salaries.
A “triple lock” guarantees that the state pension will increase by the highest of three rates – average earnings, inflation or 2.5 per cent.
The move will add £3.22 to the current single pension of £115.95 a week – an annual rise of almost £170. A total of £70bn will be spent on the state pension in 2015, more than the combined education and Home Office budgets.
However, this will cost taxpayers £6bn, doubling the £2.9bn originally forecast.
“Government actuaries have warned that, since 2010, pensioners’ income is £10 a week, higher than if it had been upgraded by earnings alone”, says Keith Richards, chief executive officer of the Personal Finance Society.