The government has confirmned the state pension increase this month – as Secretary of State Liz Kendall issued a statement about the ‘triple lock‘. As the new tax year started on April 6, officals said that people will enjoy a rise of around £472 a year – starting on April 7, officials confirmed.
However on the older state pension people will in fact get £363 a year more – £100 less. The Triple Lock – which guarantees that the State Pension increases annually by the highest of inflation, average earnings growth or 2.5% – means the basic and new State Pensions are increasing by 4.1%, well above the current level of inflation.
Some commentators have suggested the government may be considering endit the triple lock – however this week Ms Kendall stated her commitment to it. She said: “Our ironclad commitment to the triple-lock gives pensioners across the country the certainty and security they need to live a full life in retirement.
“We are putting more money in people’s pockets and driving up household income.”
The state pension has now gone up by 4.1%, to match rising wages, under the so-called triple-lock.
The increase mean it is worth:
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£230.25 a week for the full, new flat-rate state pension (for those who reached state pension age after April 2016) – a rise of £472 a year
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£176.45 a week for the full, old basic state pension (for those who reached state pension age before April 2016) – a rise of £363 a year
In general, you need 35 years of qualifying contributions to get a full state pension.
The new tax year does see another freeze in income tax thresholds.
This is what is known as fiscal drag. It means that while income tax rates have not risen, the income levels at which they are paid have been frozen, and will continue to be so until 2028.
That will draw more people – as they receive a pay rise – into paying higher rates of tax, or being taxed on a larger proportion of their income.
Minister for Pensions Torsten Bell said: “Raising the State Pension and rescuing the NHS – these are this government’s priorities to give all pensioners the dignity they deserve in their retirement. Those who have worked hard throughout their lives, paying into the system, are owed nothing less.
“We’re improving the lives of millions of pensioners through our £7.84 billion additional funding for the State Pension this year. That means up to £470 extra in pensioners’ pockets from this week and comes alongside our work to boost Pension Credit uptake, and the £26 billion we’ve invested in the NHS that has seen waiting lists in England fall for 5 months in a row.”
