Average state pension rises to £124 a week

The average state pension payment for 2012/13 is estimated to be £124 a week, an increase of £6 on last year.

The basic state pension will increase from £102.15 to £107.45 a week from this week. The basic state pension will be 17% of average earnings, the highest it has ever been in any year since 1997.

The government is spending £6.6 billion on uprating benefits this year, including £4.5 billion to pensioners in extra spend on the state pension and pension credit.

The triple guarantee to uprate the basic state pension by the highest of earnings, prices or 2.5% will mean that the average person reaching state pension age in 2012/13 can expect to receive an additional £15,000 in basic state pension over their retirement.

Prime minister David Cameron said: “We brought in the triple-lock to restore the link between pensions and earnings, guaranteeing the basic state pension rises by whichever is highest out of rises in prices, average earnings or 2.5%.

“Today, we are delivering with 5.2% increase in the basic state pension, an extra £5.30 a week, the largest cash rise in history.”

Steve Webb, pensions minister, added: “My first concern is to make sure our pensioners have a decent income in retirement, and that is why we are paying out £4.5 billion extra from this week, boosting the average state pension to £124 a week.

“Uprating the basic state pension by the highest of earnings, prices or 2.5% will have a dramatic impact in driving up the value of the state pension.

“This is one of the biggest spending commitments we have made in difficult economic circumstances, and will provide more money for pensioners both now and in years to come.”