September's annual measurements of price inflation determine more than just changes in the cost of living, particularly for pensioners.

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Why the September CPI figure matters

The September CPI inflation figure is important as a number of benefits are increased in line with it in order to keep up with the cost of living.

The government has already announced that a number of benefits, such as child benefit and Jobseeker's Allowance, will be frozen next year. And as downrating benefits is not allowed, the negative drop means that almost all benefits, apart from the state pension, are likely to be frozen from April 2016.

What it means for the state pension

The basic state pension is protected by a ‘triple lock’ guarantee, which ensures it increases every year by whichever of these three figures is the highest:

• September CPI measure of inflation;
• Average earnings growth; or
• 2.5%.

Earnings growth is running at around 2.9% according to the ONS, so pensioners receiving the full basic state pension will see their income rise from £115.95 per week to £119.31.

It’s worth noting that the state pension is changing from April 6 next year and many will be eligible for the new state pension which will pay a flat rate. At the moment the full weekly rate is set at £151.20, the current level of Pension Credit.

However, it remains unclear whether the 'triple lock' applies to the new state pension. If it does, then the 2.9% increase would bump it up to around £155.50.