1 week Ago By [email protected] (James Rodger)
Martin Lewis warns pensioners will earn £112 less than the new Labour Party government want them to believe. The old State Pension and new State Pension will rise by 4.1 per cent in April, but because the payments differ the rise will not be the same.
Mr Lewis explained in a post on MoneySavingExpert.com that while the government will "likely" trumpet next year's State Pension rise of £475, this doesn't reflect the reality for many pensioners. He added: "That figure is for the full – new – State Pension, which only applies to the one in four who hit state pension age on or after April 6, 2016.
"The majority are still on its predecessor, the old State Pension, which is lower, and so the 4.1 percent rise of that is the smaller figure: £362.65.
" Key to the calculation is the “triple lock” - the pledge that annual increases will be the highest of either earnings, inflation, or 2.5%. With fresh figures showing inflation down to 1.
7% in September, average earnings of 4.1% is likely to be the measure used for next April’s rise. READ MORE TMZ issues major update after publishing Liam Payne dead body photos On that face of it, it looks like the state pension will go by £473 a year.
But i t applies to the full rate of the new state pension, which is paid to those who reached the state pension age after April 6, 2016. It is currently £221.20 per week, or £11,502.
40, and is set to rise to £230.30 a week, or £11,975.60 a year.
As the charity Age UK helpfully points out, just 27% of pensioners get the new state pension - equivalent to 3.4 million older people. Yet that means nearly three quarters of pensioners - about 9.
3 million people - won’t get the expected £473 increase. That’s because they are on the old state pension, given to those who reached state pension age before April 2016. It is currently £169.
50 per week, or £8,814 per year. If all goes up as expected, it will rise to £176.45 a year, or £9,175.
40 a year. So, in reality, most pensioners will theoretically be around £361 a year better off. That applies if you’re a man who is 73 and older, or a women aged at least 71.
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