State pension rise ‘certainly justifiable!’ – payments could exceed £200 a week

Campaigner appeals for state pension release for dying people

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

This hike to the state pension will be brought about by the pending return of the Government’s triple lock pledge. The triple lock promises to raise payments by whichever is higher out of 2.5 percent, the rate of inflation or average earnings However, the link to average earnings was temporarily scrapped last year due to furlough artificially inflating wages. Under the temporary double lock, state pensions increased by 3.1 percent, in line with the inflation rate for the year to September 2021.

Earlier this year, then-Chancellor Rishi Sunak confirmed the triple lock would be fully reinstated which will result in pensioners getting a financial boost.

This looks likely to remain in place as Mr Sunak’s competitor in the Conservative leadership race, Liz Truss, has also pledged to return the triple lock.

Currently, the UK’s inflation rate is at 9.4 percent and is expected to exceed 13 percent in the coming months.

The Consumer Price Index (CPI) for the year to September 2022 will be used to determine the rate at which benefit payments, such as the state pension, will rise by.

READ MORE: State pension set to rise next year but 520,000 people will miss out

It is likely inflation will be higher than average earnings and 2.5 percent by that time, with experts predicting it will be at around 10 percent.

State pensioners will be anxiously awaiting such a rate hike amid the current cost of living crisis.

Energy bills are expected to soar past £3,600 in October and £4,200 in the New Year, according to Cornwall Insights.

Even if pension payments were to be raised by 10 percent, inflation will continue to surpass their rate to 13 percent if predictions are accurate.

The full new state pension looks set to go up by over £200 a week once the triple lock is fully reinstated by the Government.

Changes to benefit payment rates will be implemented by the Department for Work and Pensions (DWP) in April 2023.

Ed Monk, the associate director at Fidelity International, broke down how much state pensions will go up by if the triple lock is reinstated as promised.

Mr Monk explained: “The rise is certainly justifiable on the grounds that pensioners include some of the most financially vulnerable people in society, and many will be struggling to meet the costs of soaring heating and food bills already.

READ MORE: Britons in higher bracket can do 2 main things to reduce tax payments

“In cash terms, a 10 percent rise would take the [new] state pension (which applies to anyone who began claiming after 2016) from £185.15 to £203.66 per week.

“It would also take the annual income from a full state pension to £10,590.32 – the first time the payment has been worth more than £10,000 a year.”

With inflation and energy bills continuing to soar, the Government has also launched a £300 payment for pensioners to address the cost of living.

On top of this, those who claim Pension Credit will be eligible for the cost of living payment worth £650.

The financial expert cautioned pensioners on the risks of not having a retirement plan which should be the amount they receive from the state pension and other Government payments.

He added: “That’s going to be vital to help those relying solely on their state pension, but it’s important even if you plan on having other retirement savings to fall back on.

“The state pension is particularly valuable because the income it provides is guaranteed and – if promises are met – rises with at least inflation each year.

“That’s a valuable benefit that is difficult to replicate from other types of pension income.”

Source: Read Full Article