Recipients of the UK State Pension will receive a 3.9% increase to their pension income in 2020.
UK State Pension increases are currently protected by the “triple lock” which means the annual rise applying each April will be at the higher of Consumer Price Inflation (CPI), average earnings growth or 2.5%. The CPI figure is taken at September in the preceding tax year, recently confirmed as 1.7% for September 2019. The annual average earnings growth figure is taken at the preceding July, which was 3.9% in 2019.
This means the full New State Pension will increase to £175.20 per week in April 2020, and the maximum old Basic State Pension (for a single person) to £134.25 per week.
The triple lock is currently pledged until 2022 or a change in Government. It has been criticised as being too generous, as it guarantees increases at a minimum of inflation (based on CPI), but can result in increases which are significantly higher. The 2020 increase, at more than double the rate of inflation, means that the increase has been higher than inflation for all but one of 6 consecutive years. The debate on the triple lock is unlikely to be over, but any government which decides to remove the triple lock may find it to be an unpopular decision with pensioners!