Latest wage data suggests that the new full state pension is expected to rise by £460 a year from April for residents in Milton Keynes and across the UK.
The "triple lock" system ensures the state pension rises each year by the highest of 2.5%, inflation, or average earnings growth. From May to July, average earnings surged by 4%, well above inflation.
This comes amid government backlash for cutting winter fuel payments for the majority of pensioners. More than nine million pensioners will no longer qualify for up to £300 this winter, as Chancellor Rachel Reeves introduced means-testing for the payments.
Although inflation has steadily decreased in recent years, it slightly increased to 2.2% in July.
According to the latest Office for National Statistics (ONS) figures, the full, new flat-rate state pension, for residents who reached state pension age after April 2016, is projected to increase to £230.05 per week, amounting to £11,962.60 annually—an increase of £460.
Meanwhile, the full, old basic state pension, for residents who reached state pension age before April 2016, is expected to rise to £176.30 per week, bringing the annual total to £9,167.60, an increase of £353.60.
Steve Webb, former pensions minister stated that the new state pension would need to rise by over £250 to keep pace with inflation. Consequently, only around £210 of the £460 represents an actual increase, Steve said, "and this is before allowing for the income tax which most pensioners will pay on their state pension rise". He continued, "Those who lose £200 or £300 in Winter Fuel Payments will therefore still be worse off in real terms next April”.
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- the Money Advice Service
- the Pensions Advisory Service
- Pension Wise
You can find more information on MoneyHelper on the Milton Keynes City Council website.
