The government has confirmed a one-year suspension of the ‘triple lock’ for annual state pension increases. The ‘triple lock’ is a formula used to guarantee pensioner’s incomes rise by either September’s rate of inflation, earnings growth, or a guaranteed minimum of 2.5% – whichever is larger. But the government confirmed today that the average earnings component would be disregarded in 2022-23 (as it was last year) and the rise will temporarily be replaced with a ‘double lock’ linked to either inflation or 2.5%.
Pensioners were on track to get a record boost to their state pension next year thanks to artificially high earnings growth – by more than 8% thanks to the effects of the furlough scheme, according to the Office for Budget Responsibility (OBR).
he news is the second blow for pensioners in one day. Earlier, the Prime Minister announced a 1.25 percentage point hike to National Insurance contributions from 2022, which will also apply to workers that have reached state pension age from 2023.
Under the double lock system, the state pension is expected to increase by September’s rate of inflation (announced in October) or the 2.5% guaranteed minimum. This means retirees under the new state pension system can expect payments to go up from £179.60 a week to at least £184.10 in the 2022-23 tax year. While the basic state pension will be increased from £137.60 to at least £141.05 from next April.
The usual “cup of coffee and a piece of cake” rise …
I shop at Booths, the “posh” supermarket of the North-West (the family firm that Waitrose tried to buy and failed) - their loyalty card entitles me to Café Offers :
Any Breakfast Sandwich & Regular Hot Drink or Fresh Juice £4
Any Croissant & Regular Hot Drink or Fresh Juice £3
Not only do we in the UK get one of the lowest penions in the developed world but our leaders want to cut the pittance of a rise we get. And where politicians are concerned temporary invariably means permanent.
The being the case then the government should freeze all price increases for pensioners. It’s this continual merry go round of increases in everything that causes so many problems. Recently I had to take out a 12-month contract for my mobile phone service, the same with the broadband service. Both contracts had built-in a 3.9% increase on 30 March each year PLUS an additional percentage increase in line with inflation. There is no alternative but to accept this as it’s a contract, don’t sign and agree to it and there’s no mobile or broadband service, and who can do without either of those!
Another and continual rip-off, especially for singletons. I am paying around £45-£50 a week Council Tax. A family living in the same kind of property but there are seven adults, all working, that works out to around £7 a week per person. They use seven times the local facilities and generate seven times the refuse I do yet only pay one-seventh of what I have to pay. Where is the fairness in that? It’s like expecting a person on minimum wage to pay the income tax of someone earning seven times the minimum wage – grossly and totally unfair!
This was Maggie Thatcher’s thinking when she introduced the Community Charge to Scotland in 1989 a year prior to the rest of the UK. It caused quite a stushie up here I can tell you. It was branded the Poll Tax and was never implemented. I thought it had some good points.
There were the Poll Tax Riots down here, probably due to people having to pay for what they use. Not having done that before there were objections in the shape of riots. What can be more fair than paying for what you use? My refuse bins are collected weekly / two weekly depending on which one, mine are only full about every two months. Those who are paying one-seventh of the Council Tax I have to pay put TWO refuse bins out every week. I wonder what those types of families would reckon if they had to pay £45-£50 a week each for the services they use?
My state pension increases every March and September, by law it is tied to the average male wage.
I only get a part pension because I have too many assets (largely in the form of superannuation) to qualify for a full pension (bastards) but just received my letter from Centrelink so I know exactly what the new rate is.
Currently I get $862 per fortnight but will get $882 from the 27th September. That’s an increase of $20 so about £5 per week (ie much the same increase as yours)
BTW the full single pension is currently $952.70 per fortnight ($1436.20 for couples). Obviously the pension increase for full pensioners will be proportionally greater.
To be fair Australians do not contribute at all to their pension, it is the same amount for every citizen and only requires 10 years residence in the country. The pension comes out of general taxation but is means tested.
The Hawke/Keating government introduced a compulsory superannuation scheme with the aim of reducing the dependence on the pension. The superannuation however is available at 55 so it is possible to retire and spend it all before getting to pension age.
The superannuation scheme has some very distinct tax advantages, it doesn’t count as income so it is tax free, contributions can be made before income tax is applied. Whether future governments are as generous remains to be seen. My superannuation is the main reason I don’t receive a full pension.
I edited this post because i thought the Abbott government had added a work requirement but on checking that is not the case, the only additional requirement that I can see is that 5 of the 10 years residency must be continuous.
I was under the impression that in the UK you contributed toward your pension and its value depended on how long you contributed.
When I retired I had contributed about 8/9 years in the UK and was told a sum I could pay to make it up to receive a UK pension. I declined as every dollar I received reduced my Australian pension by 50c, it was easier to say no, it was a very small amount anyway and was not indexed.
The UK Basic State Pension is £137.60 (AU$258.79) a week, £275.20 (AU$517.59) per fortnight so in Australia it would seem you have far better pensions than here in the UK.
To qualify for that Basic State Pension In the UK we have to have contributed for 30 years, so again Australians do far better in that respect.
The above depends on your date of birth and is further complicated now by the introduction of a new State Pension if you are a man born on or after 6 April 1951 or a woman born on or after 6 April 1953.
The UK new State Pension is £179.60 (AU$337.79) a week, £359.20 (AU$675.58) per fortnight.
To qualify for the new State Pension In the UK we have to have contributed for 10 years.
It would be difficult to accurately calculate my National Insurance contributions, on which my pension is based, over 30 years. What I do know though is that during the 55 years of my working life total deductions from my wages, including income tax (PAYE), were 30%, quite an amount when it’s considered what we receive for that, or more accurately do not receive.
Incidentally it’s almost a necessity to have a degree to work out our pensions they are so complicated. Have a look at the links provided and you will probably see what I mean, it’s a nightmare to work out.
