The final figure could be different if official earnings figures are revised, however it is expected to be decided by work and pensions secretary Liz Kendall around the time of the autumn budget in October.
The news of an expected rise to the UK’s state pension comes as the government has faced backlash over its decision to cut the winter fuel payment for the majority of pensioners.
The payments of between £200 and £300 a year were made to more than 10 million pensioners to help them pay their energy bills, however chancellor Rachel Reeves announced in July that they would be axed for all but the poorest.
Reeves confirmed that the payment would now only be offered to pensioners in receipt of pension credit and other means-tested benefits, saying it was the “responsible thing to do to fix the foundations of our economy”.
Prime minister Keir Starmer has also defended scrapping winter fuel payments for pensioners not on benefits, claiming the Labour Party can only deliver change in the future if it does “the difficult things now”, adding that the decision to remove winter fuel payments was part of “fixing the foundations” of the economy.
He also argued that he could guarantee that the annual increase in the state pension, along with the triple-lock policy of pension increases, would “outstrip any reduction in the winter fuel payment”.
The UK business secretary Jonathan Reynolds also described the decision as “difficult”, adding that the policy had not been in the Labour election manifesto as the party “did not know the situation we would inherit”.
He added that pensioners would not see the amount of money they receive decreasing due to the cuts, telling BBC Radio 4’s Today programme that pensioners would be better off this winter because the state pension was rising, bills were falling, the warm homes discount was available, and the government had agreed to maintain the pension triple-lock.
“We are making sure that we can reassure people by saying the state pension is higher than last winter and energy bills are lower than last winter,” he said.
The UK’s health secretary Wes Streeting, however, has voiced his opposition to a cut to winter fuel payments, telling Sky News he is “not remotely happy about it”.
“I’m not remotely happy about having to say to some of my constituents, I’m sorry that I’m going into work this week to vote for something that will take money away from you,” he said.
According to The Guardian, as many as 50 Labour MPs could refuse to back Starmer’s decision to cut the winter fuel allowance in today’s vote, with dozens believed to be considering abstaining or being absent.
Some may have to choose between ‘heating and eating’
Experts have explained that the rise in state pension may not fully compensate for the cuts to winter fuel payments, however, and that some pensioners may still have to choose between “heating and eating”.
Speaking on X, money expert Martin Lewis explained that while it was “good news” the full state pension is set to rise, some may still slip through the cracks.
The expected rise to pensions “starts next April”, he explained. “This winter, most pensioners are facing (looking at energy bills alone) a typical £500 higher cost compared to last (energy bills are £100ish cheaper, but no £300 cost of living payment, no up to £300 winter fuel payment)”.
He added: “The full state pension rise is for those who get the full state pension.
“There are up to 800,000 of the poorest pensioners who get less than the full state pension (£11,400 a year) who aren’t claiming pension credit, and will miss out on the winter fuel payment even though they should get it.
“They are very hard to reach and will be under huge financial pressure. These are therefore people the government said should be helped, but due to difficulties in the system won’t be. These are the people I’m most worried about, some of whom may end up choosing between heating and eating.”
Lewis explained that only one in four pensioners get the “new” state pension, for those who reached state pension age after April 2016, and that the “old” state pension also has the triple-lock, but “as it is on a lower base won’t rise as much”.
Simon Francis, coordinator of the End Fuel Poverty Coalition, told the Big Issue that cuts to the winter fuel payment could lead to “compromising the health and safety of older people”.
“Pensioners who will now miss out on winter fuel payments will cut back on energy use to make ends meet and this could mean they live in cold or damp homes,” Francis explained. “It is well established that living in these conditions increases the likelihood of people turning to the NHS and even dying.”
He added: “While we support what the government is doing to bring down the cost of energy in the long term, through more renewables and a warm homes plan, we can’t lose sight of the suffering happening right now.
“We will need to see support for households in fuel poverty and energy debt for the next few winters. That will include payments to those most at risk of living in cold, damp or mouldy conditions.
“Unless Sir Keir Starmer compromises on the winter fuel payment axe, he will be compromising the health and safety of older people this winter.”
Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.
