By April of next year, state pensions will rise by £2.40 per week, despite the negative Retail Index Price of last month.

September’s inflation usually determines the rate at which pensions are altered in April. However, since 2001 the government has implemented a new policy whereby a minimum of 2.5% is awarded if the RPI is lower.

It was announced on Tuesday that the Retail Price Index was -1.4%. The RPI is also linked similarly to other benefits like the carer’s allowance, disability living allowance, council tax benefit and incapacity benefit. This is measured as the Rossi Index (RPI minus housing costs) and this is currently set at +1.8%.

It is likely that benefits and allowances will also rise by 2.5% in April, although the final amount will be determined by the Chancellor’s pre-Budget report.