Basic state pension set to rise to £119.30 a week

The basic state pension is set for its biggest rise in real terms since 2001, the Treasury has said.

Chancellor George Osborne will confirm the increase to £119.30 a week from April 2016 in next week's Spending Review.

The 2.9% rise will be worth an extra £174.20 a year to someone on a full basic state pension.

Pensions minister Ros Altmann said pensioners had "done their best for society, worked hard, and we owe them".

The Treasury also said in a statement that the government was meeting "its pledge to help to deliver security for older people as savings are made in other budgets".

'Security in retirement'

A triple-lock pledge on pensions - a government promise for the next five years - means the state pension rises each April to match the highest of inflation, earnings, or 2.5%.

This latest increase will take total spending on the state pension to £95bn next year.

From April 2016 the full basic state pension will be worth around £1,125 a year more in cash terms than in 2010, a figure that will rise to at least £1,770 by the end of this parliament.

Baroness Altmann said: "Over the last quarter of a century, pensioners have fallen below the rest of society as average earnings have done so much better than the increases in the state pension.

"Since 2010, we have really begun to correct that.

'We are now back to the highest level for a quarter of a century - and quite right too. Pensioners deserve to be treated much better than they have been in the past and to have security in retirement."