Will the UK State Pension top £10k in 2023?

For the first time ever, the UK state pension could be worth more than £10,000 per annum after inflation reached a high of 10.1% in September 2022.

A sharp rise in inflation should mean that from April 2023, the state pension will increase, thanks to what's known as the 'triple lock.' However, there have been some concerns about whether the triple lock system for pensions will remain in place.

Need clarification about what this means for you and your pension payments? This article provides a brief summary of some important information regarding the UK State Pension for 2023 and the government announcements we're waiting all for.

How much will the UK state pension be in 2023?

The full New State Pension is currently £185.15 a week (around £9,630 per annum) and will remain the same for the rest of the 2022 / 2023 tax year. However, if the triple lock remains, the rise in inflation to 10.1% would see the UK state pension pay almost £204 a week, or £10,600 per annum.

This increase would mean that pensioners will be £972.40 better off by the end of the 2023-24 tax year.

Unfortunately, this will only apply to some. What you get from your State Pension depends on your National Insurance record, so you might get less than this. You can check your State Pension forecast here.

It's also worth remembering that if you reached the state pension age before April 2016, you receive what's known as the 'Basic State Pension' instead. This is currently £141.85 per week and is set to rise to £156.20. So pensioners receiving the Basic State Pension will be £746.20 better off by the end of the 2023-24 tax year.

What is the triple lock for pensions?

In 2010, the Conservative-Liberal Democrat coalition government introduced a triple lock guarantee on New State Pension payments. As a result, state pension payments are increased each year by whichever of the following rates is highest:

• September's Consumer Price Index (Inflation)
• Average earnings growth (as of July)
• Guaranteed minimum of 2.5%

However, things are slightly different for the 2022-23 tax year, where the government reduced the triple lock safeguard to a double lock. Due to an 'artificial' growth in wages, following the pandemic, qualified pensioners would have seen their state pension skyrocket by 8.3%. However, by changing the triple lock to a double lock, the state pension increased by 3.1%, in line with inflation instead.

Will the triple lock be enforced?

At the moment, we are not 100% certain whether the government will keep the triple lock protection for UK State Pensions. The State Pension triple lock has long proved a source of controversy for politicians, and with Prime Minister Rishi Sunak refusing to comment on honouring the pledge upon entering Number 10, it's caused significant worries for pensioners all over the country.

It is also understood that the Chancellor of the Exchequer, Jeremy Hunt, has been considering linking the state pension to average earnings (approximately 5.5%) instead. This would be almost half the rise in inflation and a huge blow for pensioners.

However, as of 8th November, the news is that the Prime Minister is expected to honour the state pension triple lock. The Times is reporting that there will be an increase in state pension and welfare payments in line with inflation announced in the autumn statement on 17th November.

When will the UK State Pension increase?

As it stands, pensioners will receive an increase in their state pension in April 2023. It usually occurs on the first Monday of the new tax year (2023-24), so you should expect your first payment increase on Monday, 10th April.

Retirement Planning with Samuels LLP

If the news of the state pension payment increases has got you thinking about your retirement plans, talk to us. It's never too early to start thinking about your future, and we are here to provide the bespoke planning you need to enjoy financial security in your retirement.

For more information, Book a Free Consultation with us.