Pensioner calls for his state pension to be 'unfrozen'
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Last year, the Department for Work and Pensions (DWP) outlined plans to increase state pension payments in line with the Consumer Price Index (CPI) rate of inflation. As a result, state pensioners will receive a 3.1 percent to their payments which are awarded via the DWP. With the cost of living also going up, people of state pension age in the UK may have to rely more and more from the DWP for support.
With the upcoming payment rise, the basic state pension will go up from £137.60 per week to £141.85.
Conversely, the full new state pension will increase £185.15 per week from £179.60, according to the DWP.
Those who claim the state pension can either choose to receive payments weekly or every four weeks.
The pending changes to the amount received from the state pension will come into effect as of Monday April 11, 2022.
READ MORE: State pension to hit £10,340 as triple lock saved – some get less
Last year, the Government opted to scrap the triple lock guarantee on state pensions, which means payments would either go up by 2.5 percent, inflation or average earnings.
However, due to the pandemic artificially inflating earnings figures in the UK, the Government chose to temporarily suspend the earnings limit for one year.
Defending the decision, the DWP said: “In taking this decision, the Government carefully considered the fairest approach for both pensioners and younger taxpayers, many of whom have been hardest hit by the financial impacts of the pandemic.
“In addition, last year, we delivered primary legislation to increase State Pensions by 2.5 percent, when earnings fell and price inflation increased by half a percentage point. If we hadn’t taken this action, state pensions would have been frozen.”
Earlier this week, figures from the DWP revealed that the average pensioner’s income rose to £361 a week in 2020/12, after housing costs.
This represented a slight increase from the £333 a week reported in 2019/2020 for pensioners.
DWP statistics also showed that the average income for pensioner couples came to £511 per week.
In comparison, this was almost more than twice that of single pensioners, who had an average income of £246 per week.
Jenny Holt, the managing director of Customer Savings and Investments at Standard Life, explained why overall pensions have gone up in the last year and how state pension changes have affected overall retirement pots.
Mr Holt said: “They highlight that benefit income, which includes the state pension, is the foundation of many pensioners’ income with the payments making up more than half of the total gross income for single pensioners (56 percent), while for pensioner couples it was 37 percent.
“The decision to pause the triple lock uprating from April for 12 months will therefore be viewed as a blow by many pensioners who are on course to experience a 3.1 percent increase as opposed to the eight percent they would have experienced if it were kept in place.
“However, the Chancellor’s recent announcement confirming that the triple lock would be reinstated and applied to the 2023/24 state pension increase is positive and will provide much needed reassurance to many pensioners.”
Ian Browne, retirement expert at Quilter, added: “These figures demonstrate that benefits, including state pension, are now much less relevant for many retirees than they were 10 years ago.
“This is because overall pension incomes have been increasing, reducing reliance on benefits as a source of retirement income particularly for those below the age of 75.
“However, after 75 benefit income, which includes state pension, made up half (50 percent) of total gross income for pensioners of this age and above.
“In contrast, for pensioners who did recently reach state pension age their benefit income, which includes state pension made up 37 percent of gross income.”
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