People receiving the state pension will see their payments rise by 10.1%, Chancellor Jeremy Hunt has announced.
From April 2023, weekly payments will rise to either £156.20 or £203.85, depending on the pension.
The chancellor also said pension credit, given to the most vulnerable pensioners, would increase by 10.1%, in line with with inflation.
Mr Hunt defended the move arguing that the cost of living crisis was harming all pensioners.
He also confirmed that working age benefits would increase from April in line with inflation, at a cost of £11bn.
Delivering his Autumn Statement in the House of Commons, he said the move was “an expensive commitment” but added that it would mean “10 million working-age families will see a much-needed increase next year”.
Those on the full new state pension currently receive £185.15 per week, so a 10.1% increase would see their payments rise to £203.85.
The old basic state pension – given to those who reached state pension age before April 2016 – will rise from £141.85 to £156.20.
By increasing the state pension in line with September’s inflation rate, Mr Hunt is maintaining the triple lock.
The triple lock – first introduced by the Conservative/Liberal Democrat coalition government in 2010 – guarantees that the state pension will rise each year by either inflation, average wage increases or 2.5%, whichever is the highest.
Conservative governments have repeatedly promised to protect the triple lock, but it was suspended during the Covid pandemic, when the government’s furlough support produced an unusually large rise in average earnings.
That meant that over the past year pensions increased by the then-CPI measure of inflation, 3.1%.
There had been suggestions that the Treasury were considering ditching the triple lock, in a bid to save money; however Mr Hunt, to loud cheers from his own side, confirmed it would stay in place.
Helen Morrissey, a senior pensions and retirement analyst at Hargreaves Lansdown, welcomed the move saying: “After weeks of speculation about whether the triple lock would return next year many pensioners will be viewing today’s news with a sigh of relief.”
However, she noted that the increase would only come into effect from April adding: “There is a tough winter ahead.”
A former pensions minister Ros Altmann also praised the decision as “the right thing to do”.
The triple lock has previously attracted criticism with former Conservative Chancellor Ken Clarke telling the BBC it should be scrapped.
“Stop giving me money,” he told the World at One in June, adding: “It’s absurd, I’ve got two houses… I don’t need it.”
Currently, men and women born between 6 October 1954 and 5 April 1960 start receiving their pension at the age of 66.
For people born after this date, the state pension age is gradually increasing to 67 by 2028 and 68 by 2046.
