London Daily

Focus on the big picture.
Thursday, Sep 11, 2025

State pension to rise £4.40 a week next year in smallest possible increase

State pension to rise £4.40 a week next year in smallest possible increase

The state pension is set to rise by £4.40 a week next year, which is the smallest increase possible.

The rise means pensioners on the ‘new’ plan will see a change from £175.20 to £179.60 a week, which is an increase of £228.80 a year. Those on the ‘old’ state pension plan will receive £3.40 more a week.

It comes after the inflation rate rose to 0.5% in September from 0.2% in August, following the end of the popular Eat Out to Help Out scheme.

Jonathan Athow, deputy national statistician at the ONS, said: ‘The official end to the Eat Out to Help Out scheme meant prices for dining out rose during September, partially offsetting the sharp fall in inflation for August.

‘Air fares would normally fall substantially at this time due to the end of the school holidays but with prices subdued this year, as fewer people have been travelling abroad, the price drop has been less significant.

‘Meanwhile, as some consumers look for alternatives to using public transport, there was an increased demand for used cars, which saw their prices rise.’

September’s inflation rate is used to calculate the increase for state pensions the following year.

The current ‘triple-lock rule’ means the rise is based on whichever is higher: earnings growth of the year to July, or 2.5%.


The end of the popular Eat Out to Help Out scheme meant prices for dining out rose during September


Because earnings have been hit hard by the coronavirus pandemic this year and prices creeping up by just 0.5%, this 2.5% figure will be used to set the pension increase in 2021.

This has not yet been confirmed by the Government but an official announcement is expected later.

This is the smallest increase possible under legislation and is the fourth time the 2.5% underpin has kicked in since the triple-lock policy was introduced in 2011. It aims to prevent a state pension freeze.

Tom Selby, senior analyst at AJ Bell, said: ‘With Covid-19 hammering wages and pushing inflation to almost 0%, the value of the state pension triple-lock has never been clearer.

‘If it were not for the policy, pensioners would likely see their state pension frozen next year.

‘As it is, retirees are set to benefit from a 2.5% state pension boost in 2021/22, adding £3.40 a week to the value of the “old” basic-rate state pension and £4.40 a week to the “new” state pension.’

It comes as the UK’s national debt hit a record £2.06 trillion at the end of September, according to new data from the Office for National Statistics.


The rise means pensioners will see the change from £175.20 to £179.60 a week


It pushed borrowing up to 103.5% of gross domestic product after the public sector borrowed around £36.1 billion in September – which is £28.4 billion more than the same month a year ago and the third-highest month of borrowing since records began in 1993.

At the end of September there was £1.741 trillion of central government bonds, or gilts, in circulation to prop up the falling tax take and cover the huge expenditure made on the health crisis.

Central government tax receipts were £37.7 billion in September – which is £6 billion less than in September 2019, with large falls in VAT business rates and corporation tax receipts.

The Treasury has also announced it will scrap a planned multi-year spending review due later this year, and replace it with a one-year review to focus on the impact on the public accounts from the pandemic.

The review will take place by the end of November and focus on supporting jobs, setting department resources and capital budgets and block grants for devolved administrations.

Chancellor of the Exchequer Rishi Sunak said: ‘In the current environment it’s essential that we provide certainty.

‘So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs.’

Newsletter

Related Articles

0:00
0:00
Close
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
×