Yahoo Finance State pensioners to get £351 pay rise
Pensioners are in line for an income boost next year because of big pay rises for British workers.
Under the “triple lock”, the state pension is increased each April by the higher of inflation, wage growth or 2.5pc. Inflation grew by 1.7pc in September meaning the increase will follow wage growth, which has been higher.
Experts said April should bring a 3.9pc increase, which would boost payments for the new state pension by £6.75 to £175.35 a week, a £351 a year overall increase, and from £129.20 to £134.37 for those who started drawing a pension before April 2016.
Andrew Tully, of Canada Life, the pensions firm, said the above-inflation increase is the third highest since the triple lock’s introduction.
He added: “This increase does cast a spotlight on the long-term sustainability of the triple lock.”
Tom Selby, of A J Bell, a pension firm, said: “It is likely the issue will become weaponised in the cauldron of an election battle as politicians 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.”
Meanwhile, figures from HM Revenue & Customs showed a surge in the number of people making lump sum payments to boost the value of their future pensions. You are able to make “voluntary” National Insurance contributions to fill gaps in your state pension record. In 2018-19, these contributions were worth £119.3m compared to just £12.8m in 2016-17.
Sir Steve Webb, of pension firm Royal London, warned: “It is important to be careful which years are bought back, as in some cases paying extra NICs will not always increase your pension.
