State pensioners will get an increase of just a 3.1 percent from today, April 11, which is a cut in real terms with inflation set to fly past 8 percent. For some unfortunate retirees, the situation is even worse.
Chancellor Rishi Sunak’s decision to suspend the triple lock uplift for the 2022/2020 tax year is a blow for millions.
Those who get the maximum new State Pension, introduced for those retiring after April 6, 2016, will see their income rise by £5.55 a week to £185.15.
That works out as £9,627.80 a year, which is below the minimum retirement living standard of £10,900 a year.
That figure was published by the Pensions and Lifetime Savings Association last year, BEFORE this year’s inflationary storm.
Older pensioners who retired before April 6, 2016, on the old basic State Pension, will get a £4.25 rise to £141.85 a week.
Both of these are maximum amounts.
Some will get much less, depending on how much State Pension entitlement they built up during their working lifetime.
Many pensioners are outraged by what they see as an unfair two-tier pension system, with how much you get partly determined by the day you retire.
The new State Pension was designed to simplify the system but seems to have caused even more confusion, judging by Express.co.uk reader comments.
The main factor affecting your State Pension size is the number of qualifying National Insurance contributions you made during your working lifetime.
To qualify for the new State Pension, retirees need to have made 35 years of NI contributions, and 30 years for the old one.
However, before April 2010, men needed to make 44 years of contributions, while women required 39 years.
Those who did not make the maximum amount get a reduced pension as a result.
While the old basic State Pension looks lower, millions actually get more in practice, as they will have built up additional State Pension, say, via the state earnings-related pension scheme, Serps.
Others get far less, particularly women, who ended up with a patchy NI contributions record after taking time off work to raise children.
Others fell short after working part-time on low incomes, or because they relied on their husband’s pension.
It’s easy to fall through the gaps in the such a complicated system.
Today, Express.co.uk reader Verail is getting a vanishingly small State Pension increase: “My pension is a miserable £2,600 a year, I have never ever claimed a penny off the state. That’s an increase of 74p a week. I am just wondering how I can spend it.”
Another reader, RE Vet, reports getting an increase of just £67 a year, which works out as just £1.29 a week, and added: “Wow. May buy me a meal in a soup kitchen if we had them.”
These pitiful State Pension increases look pitiful as living costs rocket, with the Centre for Economics and Business Research predicting basic household spending will be £2,440 higher than at the start of the pandemic.
Reader South9 put it succinctly: “State Pension is an absolute joke. Nobody can afford to retire on it.”
Those who get less than the maximum amount should make sure they claim Pension Credit, which tops up the incomes of the poorest pensioners to £182.60 if they are single or £278.70 for couples.