Pensioners will receive a 10% increase in state pensions next year, although ministers are pushing for higher inflation for public sector workers.
The finance ministry said it plans to return to a system in which the annual state pension is increased by inflation, average income or 2.5 per cent, whichever is higher.
The increase, which will take effect in April next year, will be based on the consumer price index for September, which is expected to be around 10%. This will lead to additional taxpayer costs of £ 10 billion for state pension payments if inflation does reach 10%, which costs around £ 960 for the average pensioner. Pensions rose 3.1 percent this April, when inflation was 7.8 percent, as
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