The Chancellor has announced that the UK Government will uprate state pensions by 8.5% telling the House of Commons today it was "one of the largest-ever cash increases of the state pension".

Jeremy Hunt confirmed in his autumn statement that the 'triple lock' - which sees the state pension increase by the highest of inflation, wage growth or 2.5% - would remain in place.

“There have been reports we would uprate [the triple lock] by a lower amount to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for one million pensions whose only income is from the state.

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“So instead, today we honour our commitment to the triple lock in full," he told MPs.

The ‘new’ state pension will increase from £203.85 per week to £221.20 per week (£11,502.40 per year).

The ‘old’ state pension (paid to those who reached state pension age before 6 April 2016) will increase from £156.20 per week to £169.50 per week (£8,814 per year).

“This is one of the largest ever cash increases to the state pension, showing a Conservative government will always back our pensioners,” Mr Hunt said.

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“Including today’s measures, our total commitment to easing cost of living pressures has risen to £104bn.”

Mr Hunt said the triple lock has helped lift 250,000 older people out of poverty since it was introduced by a Conservative government in 2011. 

“It’s been a lifeline for many during a period of high inflation,” he said.

Tom Selby, head of retirement policy at AJ Bell, said: “Retirees will receive an inflation-busting state pension increase next year after Jeremy Hunt confirmed the government’s ‘triple-lock’ pledge will be fully applied in April next year.

“With CPI inflation now at 4.6% and anticipated to continue falling into 2024, today’s announcement represents a serious boost in spending power for millions of pensioners.”

Mr Selby said there had been suggestions the Treasury was considering arguing NHS bonus payouts had inflated July’s earnings figure and instead opt for the lower 7.8% figure, which strips out bonuses. 

“This could have saved the Exchequer somewhere in the region of £1bn but would also have left the chancellor open to the accusation of shifting the state pension goalposts,” Mr Selby said.

“Given where the Conservatives find themselves in the polls and the fact older people hold huge sway at the ballot box, it is hardly surprising they opted to target fiscal restraint elsewhere.”

Last month, there were rumours that the triple lock could cost the Treasury £8bn and therefore could see the government increase it by a lower amount. 

Earlier this month, a petition was also launched calling for the government to honour the triple lock in full in April 2024.

During his statement this afternoon the Chancellor said pension savers will have the right to have "one pension pot for life" under new proposed reforms.

The Chancellor told MPs: "I will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose, meaning people can move to having one pension pot for life.

"These reforms could help unlock an extra £75 billion of financing for high-growth companies by 2030 and provide an extra £1,000 a year in retirement for an average earner saving from 18."