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Pensioners in line for inflation-busting increase of 4% thanks to triple lock guarantee – News 247

Pensioners in line for inflation-busting increase of 4% thanks to triple lock guarantee  – News 247

 The rise will see the basic state pension go up by £5.05 a week to £134.25 while the new state pension – the full flat-rate introduced in 2016 – will see payouts increase by approximately £6 60 a week to £175.20. A “triple lock” guarantee ensures annual increases are decided by whatever is the highest of price inflation – average earnings growth, or 2 5 percent. Thanks to earnings growth of 3.9 percent recorded in July, the state pension will also rise  This is more than double the rate of inflation which was confirmed today at 1.7 percent Inflation is based on the previous year’s consumer prices index (CPI) measure of inflation in the year to September and on earnings in the year to September Both of these are announced in October. The triple lock is a hotly debated element to the state pension, with Conservatives threatening to end it in 2020 during the 2017 election  However, their deal with the Democratic Unionist Party saw the triple lock kept on  Tom Selby, senior analyst at AJ Bell, said: “Retirees will enjoy a near-four percent increase in their state pension payouts next year, more than double the rise in average prices during September and thus a real boost to people’s incomes  “Such a bumper increase clearly comes at a cost to the Exchequer, and with a general election seemingly inevitable the commitment of politicians to this policy is likely to be tested  “On the one hand the triple-lock is quite an odd policy, increasing the real value of the state pension arbitrarily when earnings and inflation are low ”   Suggesting a solution, he said: “It could be argued a more rational policy would establish what level a ‘fair’ state pension should be, raise the benefit to that amount and then remove the 2 5 percent element. “However, it is likely the issue will become weaponised in the cauldron of an election battle as politicians desperately seek voter approval  “Given older people usually head to the ballot box in the greatest numbers, it is extremely unlikely any party will propose significant changes to this popular policy in their respective manifestos ” However, Parliament still need to sign off the increase before it is officially confirmed  Some experts are warning that the rise will not cover the cost of the loss of the free TV Licence for pensioners – therefore overall, many will still be worse off   Trending  Former pensions minister and director of policy at financial provider Royal London Steve Webb said: “The pension rise will be great news for those not affected by the TV licence changes  “But there is a sting in the tail for around 1.7 million single people over 75 who will experience a squeeze in their standard of living once they have paid over £150 for a TV licence next year  “This makes it all the more important that older pensioners check if they might be entitled to claim pension credit so that the poorest pensioners do not face this squeeze ”   The pension is one of the most hotly contested issues of recent times thanks to changes in the state pension age at which people can claim, with more changes set to come in to effect in November, There is also a push from pensioners living abroad who are fighting for increases in the amount they get  The amount a person can claim if they live abroad varies by country, with those in EU countries set to receive an increase alongside UK pensioners, but those in Commonwealth countries not necessarily getting the same rises

Author Since: Mar 11, 2019

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