State Pension to rise by 3.1% in April 2022

The UK State Pension is set to increase by 3.1% in 2022/23, in line with September’s inflation figure. The 3.1% rise will be the third highest increase since the triple lock was introduced over a decade ago.

The result being from April the basic pension (retired before April 2015), is set to rise by £4.25, from £137.60 per week to £141.85 per week, with the full new state pension (retired after April 2015), growing by £5.55, from £179.60 per week to £185.15 per week.

Under triple lock rules the State Pension is increased by the highest of: earnings growth, price inflation or 2.5% a year. However, on the 7th September 2021, the government suspended the wages element to avoid disproportionate rises following the pandemic.

While the 3.1% increase will be welcomed by pensioners, I imagine there is a degree of disappointment as the State Pension would have increased by 8.3% had the earnings element of the triple-lock been retained. This would have increased the basic state pension to £149 per week and the full new state pension to £194.50 per week.

By removing the earnings element of the triple-lock, AJ Bell have suggested the Treasury will save around £4.5bn as a result.

Removing the triple-lock should serve as a reminder to our clients in the accumulation stage of their lives that the State Pension, while valuable as a retirement income foundation, remains uncertain and subject to change by politicians.

Both the amount you will receive and the age you receive it has been subject to significant reform over the last decade.

It is therefore crucial that anyone wanting to take control over their retirement and have a standard of living above the basic minimum covered by the State Pension, plans for their retirement and invests as much as possible as early as possible, taking advantage of tax relief and allowing compound growth to work its magic over the long-term.

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You can Book a Meeting here, or simply call 01244 347 583, or email info@innesreid.co.uk

 

This article is not personal advice,

 

 

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