Pensioners on course for state pension increase well ahead of inflation

An inflation-busting 4% state pension uplift is forecast for April 2020 under the ‘triple lock’ system.

Pensioners are set to see a 4% increase in the state pension in October, more than double the current inflation rate of 1.7%.

Under the “triple lock” rules for state pension increases, the state payout will rise by whichever is the highest of consumer price inflation (year to September), earnings growth (year to July), or 2.5%.

The increase will be confirmed when the CPI figures for September are released in mid-October, but the most recent CPI figure (for August) is 1.7%, down from 2.1% at the end of July and seems very unlikely to leap beyond 4%.

If the forecast 4% rate is used, pensioners will enjoy their biggest uplift since April 2012, when it rose by 5.2% on the back of earnings growth. Since then, the annual increase has been in the 2-3% range.

State pension uplift for widows and widowers – are you missing out?

Since the triple lock was introduced in 2011, state pensions have outstripped both prices and earnings. Insurer Aegon has calculated that a single person receiving the old basic state pension – £97.65 back in April 2010 – is now receiving £129.20, an increase of 32%, while prices have increased by 24% and average earnings by only 20%.

That sum will rise to £134.35 from April 2020, assuming the 4% rise takes effect. Those who reached state pension age after April 2016 and therefore receive the new state pension will see their income rise from £168.60 to £175.35.

However, the triple lock is an expensive arrangement for the government and there is no guarantee that it will continue beyond 2022. Government figures indicate that if the triple lock continues indefinitely, pension spending is set to rise by £35 billion over 40 years from 2020-21. Without it, or under just earnings indexation, the increase will be only £21 billion.

State pension age could rise to 75

Steven Cameron, pensions director at Aegon, comments: “Based on the latest earnings growth figures, it looks like state pensioners can look forward to an inflation-busting 4% increase in their state pension from next April.

“However, these inflation-busting increases do come at a significant cost. The state pension is not funded in advance so pensions are funded on a ‘pay as you go’ basis from today’s workers’ national insurance contributions. With the prospect of an early general election, it will be interesting to see where each party stands on commitments to retaining the triple lock for the next five years.”

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Comments

State pension increase

Pension to rise to £175.35. This will cause much protest but if you put it alongside the minimum wage or the average wage in this country it remains a pittance. An average shop worker or council worker now makes around £310 if working full time.

This poor article

The glaring failure in this article is omission as to WHY a 4% increase is on the cards (because wage inflation is around that and is part of the triple-lock).

Frozen Pensions and the 4% Increase

It is all very well celebrating this predicted increase but, for the frozen pensioner, it will be same again, again and a 0% increase.

Over half a million UK pensioners are denied any increase simply because they have retired to a frozen country - the basic state retirement pension is frozen at the same level from the day it is first paid in the host country. Yet they contributed on the same terms to the NI scheme during teir working lives as did everybody else.

The frozen pension policy is illogical - pensions are uprated in the USA but not in Canada, paid in the Philippines but frozen in Thailand....they are even index linked in the USA Virgin Islands but not the UK Virgin Islands - quite irrational.

Now the government is running out of excuses for not implementing world wide parity and suggesting they are concerned about money going abroad and the cost of Brexit! This anomaly has existed for seventy years and is the policy of successive governments.

It is disgraceful discrimination.

Frozen pensioners ignored - yet again!

If a 4% boost is affordable for 96% of UK pensioners, there is no justification for continuing to freeze the pensions of the 4% denied the fair pension for which their NI contributions were silently accepted for the decades of their working lives.

Discrimination and theft of our pension money we paid in!

But not for us in Commonwealth Countries who suffer from the triple lock-out!

Pensioners on target for an above inflation raise.

I can’t understand why the government is paying 96% of UK state pensioners an above inflation pay rise next year, yet doggedly insists on maintaining the “frozen” pensions of 4% of UK pensioners who have chosen to live in the wrong country - usually because they want to spend their retirement year’s near their families.

Pensions

This again raises the injustice of the frozen pensions of those who live abroad. We must remember the uk has a contribution based scheme, the more you put in the more you get out. By design, the State have ring fenced these funds. They can’t be used as general revenue to build hospitals or schools.
The latest idiotic reply from a Minister is the Govt need all the money they can their hands on to deal with Brexit! The notion that the best way to save the State money is to discourage its elderly citizens from living abroad is illogical. The State saves thousands on medical and social care when it’s nationals reside abroad.

Frozen pensions

Once again, the people who chose a commonwealth country to retire to never get an increase. We put in just as much as everyone else. It's shameful. Time to unfreeze frozen pensions. After all, we don't cost the government anything in housing, health care or bus passes etc so we're really actually saving the DWP money.

Frozen pensions

I live in Australia and my pension is at 2001 level it my costs are at 2019. Very unfair as the pension fund was paid for by me for all the years I worked in England. Not paying it is actually theft.

Frozen pensions

I live in Australia and my pension is at 2001 level it my costs are at 2019. Very unfair as the pension fund was paid for by me for all the years I worked in England. Not paying it is actually theft.

No Pension increase if you reside in Oz

Whooptidioo! Meanwhile 500,000 pensioners overseas are locked OUT from any pension increases for LIFE!

We all contributed. How about a bit of equity for all?

No Pension Increase If You Reside Abroad

Surely you all knew this when you moved abroad, why all the moaning and groaning. Probably living a better lifestyle than we are here in the UK

Pension increase

So what does this do for all those pensioners who have paid in the same but who want to live near their families in other countries .....nothing! It just puts them further behind in the cost of living,it forces them to return to the UK often alone and with no support to use the welfare support that they have saved the government in years they have lived away. This and other governments have stolen these people's pension and the right to live where they want.It is not consist nor rational and should be stopped.

Age pensioners

What about all the pensioners living overseas who have paid their contributions all their working lives but never get any inctrease at all? I am in Australia but if I moved to live with my son in the US or to my partner's home in Croatia I would get the uprating. Why the difference? Discrimination!

UK Pensions

Good news for UK based pensioners but if the government can afford this increase why can’t they afford it for the rest of us in places like Australia who are frozen out of any increase?

UK Pensions

Good news for UK based pensioners but if the government can afford this increase why can’t they afford it for the rest of us in places like Australia who are frozen out of any increase?

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