State Pension pay to rise £460 next year
The latest increase would take State Pension pay close to the £12,000 mark, but new research suggests retirees need at least £17,200 for a basic living standard.
The value of the State Pension is almost certain to rise by £460 in the 2025/2026 tax year.
It means the full New State Pension will rise to £230.05 a week, or £11,963 a year, while those who retired before 2016 will get £9,168 on the old State Pension.
The increase will work out to little more than half the £900 increase seen in April of this year.
How the 2025/26 State Pension rise is worked out
The rate at which the State Pension increases is calculated using the triple lock system.
This means the Government chooses the highest out of three separate figures, namely: wage growth in the three months to July, CPI inflation in September and 2.5%.
Figures out today have confirmed that wage growth to July came in at 4%.
While the inflation figures will only be revealed in October, it seems extremely unlikely it will rise above the 4% mark, given it currently stands at 2.2%.
So wage figures look set to be used, which will mean a £460 hike as mentioned above.
State Pension 'already £5k short of decent standard'
While any increase is obviously welcome, the relative value of the State Pension was put into stark focus by a recent report from the Joseph Rowntree Foundation.
It found that a single pensioner living alone would need £17,200 a year just to meet their basic needs.
That means, even after next year's increase is factored in, the State Pension will still fall more than £5,000 short of this target.
Many financial hurdles to come for older Brits
As if things weren't bad enough, pensioners will face a number of financial difficulties over the Winter.
The headline change is the Government's decision to scrap the Winter Fuel Allowance for millions of retirees, meaning a loss of up to £300 compared to previous Winters.
What's more, annual energy bills are set to rise £149 from October as a result of changes to Ofgem's Energy Price Cap.
Throw in the fact that Cost of Living Payments will no longer be made this Winter and possible tax hikes coming in next month's Budget, and it's clear many retirees might actually be worse off despite next April's expected £460 State Pension pay rise.
Most Recent
Comments
-
The full New State Pension will rise to £11,963 a year, while those on the old State Pension will get £9,168. So two pensioners, in the same system get significantly different payments having paid the same rates. Who the hell thought this was fair? Oh, and we also get the lowest pension in Europe. The Dutch get 100% of the average wage, we get about 33%. What was the point of EU membership for over 40 years. No alignment whatsoever.
REPORT This comment has been reported. -
@rbgos Yes, I agree with much of what you say. I also notice that bengilda chose not to make a comment. However, £35 a month is a huge amount when you are on minimum. I say that because many people live in family units, Kids have to be catered for. That costs money. You point out obvious variables. Again I agree, there is no simple answer to the problem. This issue doesn't have an answer, only the better off will benefit. Thanks for your comment.
REPORT This comment has been reported. -
Good guy - for someone working minimum wage, they would have to put away just £35/month, or 2% of their salary, matched by their employer, to take them over the £17,000 income suggested in the article. Not literally “pennies”, but not a big contribution. This is in fact half the minimum legally required contribution (8%, at least 3% of which from the employer). Depends what you call a “nice little income”. Also it makes a massive difference if you own your home, mortgage paid off before you retire, or are still paying rent.
REPORT This comment has been reported.
Do you want to comment on this article? You need to be signed in for this feature
13 September 2024