You are here: Home - Retirement - Retiring now - News -

State pension increase confirmed

0
Written by:
28/11/2016
The government has confirmed next year's state pension will increase by 2.5% under the ‘triple lock guarantee’.

The annual up-rating will take place in the first full week of the new tax year and applies to both the new flat rate state pension and the old basic state pension. Pensioners receiving the flat rate pension will see their weekly income rise from £155.65 to £159.55 per week. Those on the basic state pension will get £122.30, up from £119.30.

The triple lock guarantees that the state pension will increase by the higher of inflation, earnings growth or 2.5%.

The guarantee is only a government promise. Legislation requires only that the Basic State Pension increases in line with earnings.

The triple lock mechanism has come under attack recently, with a group of MPs calling it ‘unfair and unsustainable’.

In last week’s Autumn Statement, the Chancellor Philip Hammond confirmed it would stay in place until 2020.

However, he said it would be reviewed ahead of the next Parliament.

Tom McPhail, head of retirement policy at Hargreaves Lansdown, said: “Pensioners can’t continue to enjoy indefinitely a ‘heads I win, tails you lose’ guarantee at the expense of taxpayers. A review now looking beyond 2020 makes sense.

“The point of caution in favour of those approaching retirement is that final salary pay outs are about to start diminishing and some are arguing that existing private pension inflation proofing should be cut. Politicians have to strike a delicate balance but if they take too much away from pensioners they could end up sowing the seeds of the next pensioner income crisis.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Average household holds £4,353 in ‘excess’ savings

After a year of lockdowns, average savings have rocketed, but many savers may face penalties when it comes to...
Average household holds £4,353 in 'excess' savings

Sky warned about end-of-contract notification breach

Ofcom has found there are “reasonable grounds to believe” that Sky may have broken consumer protection rules r...
Sky warned about end-of-contract notification breach

130 million old £1 coins still out there: what to do if you have one

An estimated 131 million old round £1 coins have yet to be returned to the Royal Mint, nearly three years afte...
130 million old £1 coins still out there: what to do if you have one

Ryanair jetting towards US flights for £10

Ryanair is on course to achieve its long-held ambition of offering transatlantic flights to the US – and the...

Investing in car parks: a good vehicle for income seekers?

As the search for income continues, many investors are turning to alternatives, with car parks becoming increa...

A quick guide to guarantor loans – in association with Guarantor Loan Comparison

Considering a guarantor loan or becoming a guarantor yourself? Read our essential guide...

Results round-up: Companies to watch this week

Mulberry and more will face the music this week.

Product launches of the week

Select Property Group, Schroders, Leeds Building Society and more have exciting news this week.

Money Tips of the Week

Read previous post:
Investors pulled nearly £1bn out of equity funds before Trump win

Private investors remained in cautious mode in the run up to the US election, pulling nearly £1bn out of ‘higher...

Close