Autumn Statement: Key announcements from Jeremy Hunt
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Chancellor Jeremy Hunt set out in the Autumn Statement that the triple lock pledge will apply next year. The policy guarantees the state pension increases in line with the highest of 2.5 percent, the increase in average earnings or inflation.
The return of the policy means the September figure for inflation, at 10.1 percent, will be the basis for increasing payments next April, with the full new state pension to go up to more than £200 a week.
Mr Hunt hailed the payment boost as the “biggest ever cash increase” for the state pension, which many older Britons rely on.
But hundreds of thousands of pensioners will miss out on the income boost as their payment amount is frozen.
Those who live in certain parts of the world do not get the increase, with their sum frozen at the amount it was when they left the UK or one of the eligible areas.
State pension increases are only guaranteed in the following places:
- The UK
- European Economic Area (EEA)
- Countries with a social security agreement with the UK – but not Canada or New Zealand.
Campaigners from the End Frozen Pensions Campaign estimate some 520,000 people miss out on the pensions boost.
A spokesperson for the group said: “While we welcome the continued uprating of state pensions, the exclusion of British pensioners living in ‘frozen’ countries is yet another bitter blow for half a million pensioners who have paid their dues and contributions just like everybody else.
“This cruel two-tiered system leaves British pensioners trapped on meagre state pensions, dwindling in value year on year.
“Once again, we urge the Prime Minister to end this disgraceful postcode lottery and pay all pensioners the pension they deserve.”
People can get their state pension uprated to the current rate if they return to the UK even if only temporarily.
But campaigners argue many elderly people cannot make the journey due to travel expenses or lack of mobility.
They said many pensioners are living “in poverty” because of the situation, despite consistently paying National Insurance contributions towards their state pension.
Those on the full new state pension will see their weekly payments increase from £185.15 a week to £203.85 a week.
Pensioners on the full basic state pension will also get a payment boost with their payments increasing from £141.85 a week to £156.20.
Steven Cameron, Pensions Director at Aegon, warned the policy may not last much longer.
He said yesterday: “Today’s confirmation of honouring the triple lock for 2023/24 means pensioners can breathe a huge sigh of relief after a white knuckle roller coaster ride of past disappointments, new promises and a series of U-turns.
“But next year’s increase could be its ‘last gasp’ as the current formula is looking increasingly unsustainable.
“Financially, it won’t have been an easy decision for the government looking to fill a £50billion fiscal black hole – every one percent increase in the state pension costs around £0.9billion a year.
“And this isn’t paid for out of some fund built up in the past but from the National Insurance paid for by today’s workers.
“Honouring this Manifesto commitment after ditching it last time round will provide much-needed support for pensioners, many of whom are on low and fixed incomes and particularly vulnerable to rampant inflation.”
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