Meanwhile the UK government is preparing for an unprecedented increase in the state pension. Increases of at least 4.7% starting this April are expected. Basic state pension The pre-2016 basic state pension will increase to £184.75 a week. Meanwhile, people on the new state pension will be getting at least £12,534.60 a year. This rise represents an additional £561.60 annually for every new pensioner starting from this year. Almost 13 million people are still counting on this essential lifeline.
Indeed, the state pension is the second-largest government budget spending after health, shockingly enough. The increase is primarily caused by the government’s “triple lock” policy. It guarantees the pension’s value by providing that it must grow with inflation, or average growth in earnings, or a minimum of 2.5%—whatever is the most beneficial. Implementation in 2011, the Conservative-Liberal Democrat coalition first implemented this policy. Its goal is to provide some assurance that pensions will not lose purchasing power as the years go by.
For many people, the maximum state pension can be as high as £9,607 a year. This equates to an increase of £431.60 on current received. But it must be stressed that not all pensioners get the full state pension. The precise pension entitlement is based on the number of qualifying years of contributions paid, or treated as paid through the National Insurance system.
As the April increase nears, millions more stand to gain widely and deeply from these changes. Don’t let the momentum stop there. The new state pension will provide vital financial security to millions of pensioners. New claimants will receive more than £500 a year more. Such increases are extremely important, as they provide more predictable financial security in retirement.
The policy of the triple lock is primarily about protecting pensions and social security. It protects the value of pensions from inflation and wage devaluation. This policy has received bipartisan support from both liberal and conservative thinkers, highlighting the need for a consistent and secure source of income for retirees.