The Treasury expects the new full state pension to be boosted above inflation by more than £400 a year in cash terms. The internal working calculations reflect the near certainty that the state pension will be increased by average earnings figures released next week.
This is due to the triple lock, which means the state pension increases every April by whatever number is highest out of inflation, the average UK wage increase, or by 2.5%. The news comes as the government faces a backlash over its decision to cut the winter fuel payment for most pensioners.