Inflation is still falling – but it is far above the Bank of England’s 2 per cent target rate

Headline inflation has fallen to 6.8 per cent this morning – meaning that prices are on average 6.8 per cent higher than they were a year ago.

The rate of Consumer Prices Index (CPI) inflation decreased from 7.9 per cent in June, the Office for National Statistics (ONS) has said, a 16-month low.

Inflation can have an impact on the amount retirees receive through the state pension – which sometimes goes up in line with the September CPI figure – while price rises can also have an impact on your retirement pot as a whole.

Here are the consequences of today’s reading on your pension.

Inflation can impact the state pension – though this is appearing unlikely

The amount that retirees receive via the state pension is protected by something known as the triple lock, which means that it rises each April in line with the highest of:

  • The CPI figure for the previous September
  • 2.5 per cent
  • Annual average earnings growth in the period between May and July the previous year

This month’s inflation figure is not the deciding factor for the inflation element, though inflation going down as we approach autumn suggests the September figure will be lower.

Even so, because wages are now rising at a faster rate than inflation, experts have suggested that this is the factor that will determine next April’s state pension rise.

Figures published by the Office for National Statistics (ONS) yesterday have revealed that total wages, including bonuses, have risen by 8.2 per cent in the past year.

Click here to read the full article 



020 7071 3945


Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.