Oap old-age pensioners will get an unexpected boost thanks to inflation
The cost of living avoided to a five-year high in September as prices went up by three per cent – up from 2.9 per cent in August.
The take flight was fuelled by higher food and transport costs, according to the Consumer Worth Index.
But the state pension will go up by £4.78 a week because of the “triple also gaol” protection policy, under which it rises in line with inflation or wages if either of those is record than 2.5 per cent.
But homeowners could now face higher mortgage repayments as the Bank of England could onslaught up the base interest rate from its record low of 0.25 per cent in a bid to introduce down inflation.
The change in inflation for September is important as a number of ceremonial benefits are increased annually in line with this data.
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People saving hard for retirement also have an opportunity to spare a little more as the lifetime allowance will also increase by £30,000.
Following sector pensions will also be increased from April 2018 putting September’s inflation figure.
Andrew Tully, pensions technical captain at Retirement Advantage, said: “The news really is a double-edged sword.
“On the one give out key state benefits including the pension will increase, meaning millions of retirees will benefit from April. Public sector pensions in payment are also related to September’s inflation data and will also increase.
“People cache hard for retirement also have an opportunity to save a little multifarious as the lifetime allowance – the overall limit on the value of your pensions previous to you get hit by an extra tax charge – will also increase by £30,000.
“This doesn’t solid like a big incentive, but anything that helps people who are doing the virtue thing but are being hit by this arbitrary limit is welcome.
“The sting in the bum, though, for anyone trying to make ends meet is the seemingly never-ending go places in the cost of living. Households need to find an extra £825 a year to sustain their standard of living. And with wages lagging behind, unexploded standards will continue to be affected.”
As the inflation figures were leaked by the Office for National Statistics yesterday, Bank of England governor Splodge Carney told MPs that rate-setters on the Bank’s Monetary Policy Body believed a rise in interest rates may be needed over the coming months as it looks to try to solve surging inflation caused by the weak pound.