Economists polled by Pantheon Macroeconomics expect UK CPI inflation to have risen to 3.4% in September from 3.1% in August, with official figures due from the ONS on Wednesday. The September rate sets increases for many benefits, including universal credit, tax credits and disability benefits, and it also feeds into the pension triple lock. Based on published wage growth, state pensions are widely expected to rise 3.9% next year, lifting the full new state pension from £241.30 to £250.70 a week and the full basic pension from £184.90 to £192.10. Higher motor fuel and energy costs, linked to the Middle East energy shock, are driving inflation, with diesel prices surpassing £2 a litre for the first time. Prime Minister Andy Burnham has announced plans to reform the triple lock, but the changes would not take effect until 2030.
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Original headline: DWP State Pension and benefit rates latest as inflation soars to 3 . 4 %
Read the original on manchestereveningnews.co.uk ↗
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GBP/USD
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/20/2026 | 1.33800 |
| Change that session | +0.57% |
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Related news
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Andy Burnham has pledged to replace the state pension triple lock after the 2030 general election, if he wins. The current triple lock raises pensions by the highest of inflation, earnings growth or 2.5%; Burnham wants to drop the earnings link and replace it with an undefined alternative, which critic Ros Altmann says removes the most important part of the mechanism. Using current figures, September CPI of 3.5% against earnings growth of 3.9% in the three months to July means the full new state pension would rise by about £489 to about £13,068 next April, whereas under Burnham's system the rise would be the 3.5% inflation uplift, about £50 a year less, with losses compounding over time.
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Andy Burnham has pledged to replace the triple lock after the 2030 general election, dropping the earnings link that currently raises the state pension by the highest of inflation, earnings growth or 2.5%. The columnist calls the proposed replacement vague and argues the triple lock was introduced in 2011 to stop pensions falling behind wages. Under the proposed system, September's 3.5% inflation rate would be used instead of 3.9% earnings growth, leaving pensioners around £50 a year worse off than the triple lock's expected rise of about £489, with losses compounding over time. The columnist argues the earnings link should be the last part sacrificed, not the first.
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UK CPI inflation rose to 3.5% in September from 3.1% in August, its highest in nearly a year and further above the Bank of England's 2% target, though economists had expected 3.4%. Fuel prices were the main driver, with petrol averaging 169.5p a litre after rising 8.2p and fuel up 30% on the year, while airfares also pushed prices higher. Because the September rate typically sets benefit increases and feeds the triple lock, state pensions are widely expected to rise 3.9% next year, lifting the full new state pension to £250.70 a week from £241.30. Chancellor John Healey said conflicts in the Middle East and Europe were driving price rises and promised to maintain fiscal discipline in his Budget next week. Prime Minister Andy Burnham has proposed reforming the triple lock, but changes would not take effect until 2030.
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The state pension is on course to rise 3.9% next April, as wage growth far outpaced September’s inflation figures. Of about 13.3 million DWP state pension recipients, only three million will get the full triple-lock increase, which equals £489 for full new state pension claimants, while around 10 million will not. The 2.3 million people on reduced new state pension payouts, often due to contracted-out schemes or insufficient National Insurance contributions, will see smaller rises, and about 420,000 people living abroad will have their rates frozen. The DWP said £489 is only an example, since the actual increase depends on each person’s entitlement and National Insurance record.
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- State pension tipped to increase by nearly £500 as inflation rises
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