State pension to increase by 2.5% – but some pensioners will not benefit from boost
STATE PENSION payments rise annually under the triple lock mechanism in the UK, something which was brought in in 2010 in order to guarantee the payment won’t lose value in real terms.
State pension: Triple-lock ‘no longer affordable’ says Ken Clarke ( THE FAT CAT OBSCENE WEALTHY GIT)
Despite fears for the state pension triple lock’s future amid the coronavirus pandemic, the state pension will rise under the mechanism in April 2021. This means it will increase by at least 2.5 percent.
Under the mechanism, the UK state pension rises each year by whichever is the highest out of:
- Earnings – the average percentage growth in wages (in Great Britain)
- Prices – the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
- 2.5 percent.
The government has now confirmed the UK state pension will increase next year by 2.5 percent.
Commenting on the news, Ian Browne, pensions expert at Quilter, said: “As expected, the government has confirmed that state pension incomes will rise next year by 2.5 percent, maintaining the minimum increase promised under the triple-lock.
State pension payments will rise by 2.5 percent
“This will be welcome news for retirees and it means the Chancellor and Work and Pensions Secretary can, for now at least, avoid accusations of breaking manifesto pledges to the elderly.
“But it will be hard to ignore the fact that giving retirees an inflation-busting income rise, while simultaneously announcing a pay freeze on many public sector workers, is a difficult message.
“Pensioner spending is projected by the OBR to rise 27 percent by 2025/26 and the Chancellor may be forced to ask retirees to share some of the pain in future as the government seeks to restore fiscal stability.
“This is likely to come to a head next year, when an anomalous spike in wages – assuming there is a wage rebound after this year’s pay slide – triggers another rise in the state pension.
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