The state pension is set to increase by 2.6 per cent from April next year after inflation fell more than expected in September.
Office for National Statistics data published today shows the Consumer Prices Index inflation stood at 2.4 per cent in September.
The index is used for the state pension triple-lock uprating that guarantees the basic state pension will rise by a minimum of either 2.5 per cent, the rate of inflation or average earnings growth, whichever is largest.
This means the annual flat-rate state pension will rise in value by £221 from £8,546 this year to £8,767 from April 2019.
The lifetime allowance will increase in line with September’s CPI inflation figure, meaning it will rise by £24,800 to £1,054,720 next year.
AJ Bell senior analyst Tom Selby says: “Today’s figures will provide a welcome income boost to millions of people currently in receipt of the state pension. Those who get the flat-rate amount will see their annual payment increase by over £220 in April next year, a smaller increase compared to last year but still not to be sniffed at.
“With inflation returning to the economy, the value of protection against rising prices is not to be underestimated.
He adds: “In the context of the triple-lock, it’s worth noting the guarantee will cost the government nothing compared to the earnings and inflation ‘double-lock’ some have proposed. It is only in a low inflation, low earnings environment that the promise begins to bite.”
In his speech at the annual Labour party conference in Liverpool, leader Jeremy Corbyn committed to ensure the state pension would rise in line with the highest of earnings, inflation or 2.5 per cent.