While Boris Johnson promised to hold a full budget within 100 days of his election victory, many of the details of next year’s state pension increases were unveiled last month. The budget will confirm the final figures, but the changes, which come into effect in April, are based on the “triple-lock” formula. This guarantees that state pensions will rise in line with the highest of inflation, average earnings, or 2.5%.
Back in October, the date at which this assessment is made, earnings growth was running at around 4%. As a result, the full new state pension will be £175.20 a week, up from the current £168.60. Alternatively, for those who reached the state pension age before April 2016, and receive the basic state pension, the weekly payment is rising from £129.20 to £134.25.
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In another change to state pensions in 2020, the increase in state pension age will continue. By October, men and women will have to wait until their 66th birthdays to claim state pension benefits for the first time. There will then be a standstill period, with the age due to rise again, from 66 to 67, between 2026 and 2028.
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5 alternatives to Reeves’ inheritance tax raid on rural Britain as families face ‘splitting up or selling’ farmsInheritance tax limits are now so low they attack small working family farms rather than just going after tax loopholes, one Cotswolds farmer has said
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High earners at risk of £65k retirement shockHigh earners could face some of the biggest pension shortfalls when they retire, as the cost of maintaining an expensive lifestyle could erode their retirement savings
