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The poorest will get the smallest pension increase

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Written by: Paloma Kubiak
27/11/2017
Analysis of the proposed state pension and pension credit rates reveals the poorest pensioners will receive the smallest increase to their allowances in April.

The Department for Work and Pensions (DWP) has today published proposed benefit and pension rates for the 2018/19 tax year.

It shows that the state pension (flat rate) for new pensioners will rise by £4.80 a week – from £159.55 to £164.35 a week in April 2018. This is an increase of 3%.

But the pension credit rate (income-related benefit) will rise by just £3.65 – from £159.35 to £163 a week. This is an increase of 2.3%.

Since 2010, the state pension has risen annually by the highest of inflation, earnings growth or 2.5% under the ‘triple lock’ guarantee. It’s based on the September CPI figure which came in at 3% and the triple lock is guaranteed until 2020.

However, when it comes to pension credit, the only legal requirement is that it increases in line with the growth in average earnings.

Former pensions minister and current director of policy at Royal London, Steve Webb, said in previous years, the governments has found extra money within the benefits system to make sure the poorest pensioners got the same rise as their better-off counterparts, but this year this has not been done.

Webb said: “It is surprising that the government has decided to give the poorest pensioners the smallest increase. For those on pension credit, the rise is below the rate of inflation which will create a squeeze on the living standards of the poorest pensioners. By contrast, better off pensioners will get a full inflation-linked increase. For many years pensioner poverty has been falling and it would be worrying if that progress were to be reversed because of decisions like this.”

There are 3 Comment(s)

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  • George Morley

    Webb said: “It is surprising that the government has decided to give the poorest pensioners the smallest increase.”
    Webb is the last man to comment on the poorest pensioners when he inserted section 20 into the Pension Act, Made a mockery of the Scrutiny phase and so 550,000 state pensioners are now receiving NO increases to their state pension and will never get any based solely on where they now live in retirement .
    Most are to be found in the Commonwealth countries but many pensioners in other countries are treated the same !
    You will get an uprated pension in the USA but not in Canada !
    You will get an uprated pension in the US Virgin Islands but not in the British !
    You will get an uprated pension in the Philippines but not in the Falklands
    You get the picture and the fact that the country of residence has nothing to do with a pension just shows how stupid this situation is when a private insurer would be in court quicker than that for operating such a scheme !
    Just 4% of all state pensioners are denied their rightful indexation while the other 96% are treated equally and fairly!
    And he blithely says “It is surprising that the government has decided to give the poorest pensioners the smallest increase.”
    Or no increase Steve ?

  • protempore

    ” Steve Webb, said in previous years, the government has found extra money within the benefits system to make sure the poorest pensioners got the same rise as their better-off counterparts, but this year this has not been done.” Oh no they haven’t, the poorest pensioners are those with a frozen state pension, having paid for their pensions over a lifetime, just the same as everyone else they have NO INCREASES EVER so the oldest who are frozen the longest get just a few pounds a week when they should be getting more than 100 depending on their NI contributions. A pension that has been frozen for twenty years or more is now worth nothing and Steve Webb did nothing to change this outrageous injustice when he was pensions minister, but he was awarded a knighthood for his service. THAT really makes the frozen 4% feel warm and fuzzy……NOT.

  • Andy Robertson-Fox

    Webb is a fine one to talk, he who as Minister of Pensions for five years not only ıgnored the current frozen pensioners but incorporated this illogical, irrelevant and immoral denial of index linking into the 2014 Pension Act as Sectıon 20, affecting future generations.
    Hardly surprising he does not acknowledge just which section of UK pensioners, some 4% of the total, he and others discriminate against year after year.
    To me Webb’s comments are not so much critical but hypocritical

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