It also has to be said that the rise in SP is always playing catch up.
Summer pay rises and other factors driving inflation are reflected in the autumn inflation figures which then determine the rate of the following year’s SP increase.
As the SP increase takes effect from the first Monday after 6 April and the pension is paid four weeks in arrear, we may not receive the new rate until May depending on the date our pension is paid. But we will already have been paying those inflated prices for goods and services for up to a year.
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The state pension will not be means-tested under Labour, and the triple lock is safe
(79 Posts)From the i.
inews.co.uk/inews-lifestyle/money/pensions-and-retirement/state-pension-means-tested-confirms-minister-triple-lock-3578607
The state pension will not be means-tested under Labour, Pensions Minister Torsten Bell has confirmed.
Speaking exclusively to The i Paper at the Pensions and Lifetime Savings Association (PLSA) conference in Edinburgh on Tuesday, Bell dismissed the idea of introducing means-testing when asked, stating: “No, only Kemi Badenoch thinks that’s a good idea.”
He also confirmed that he has no plans to scrap or amend the state pension triple-lock, which ensures pensions rise annually by the highest of inflation, average earnings, or 2.5 per cent.
Currently, the full new state pension is worth £221.20 per week (£11,502 per year), and under the triple-lock, this will rise by 4.1 per cent in April to £230.30 per week (£11,975 per year).
Asked whether reforming the triple-lock was being considered, or abandoning it all together as they are considering on the Isle of Man, Bell replied “no.”
His comments come amid renewed debate about the sustainability of the triple-lock, which was introduced by the coalition government in 2010, and whether means-testing the state pension could target resources more effectively.
Means-testing is a system where pension payments are assessed based on an individual’s income or savings, reducing payments for wealthier retirees.
Countries including Australia and Canada have adopted means-tested pension models, where state support is targeted at those most in need.
Conservative MP Kemi Badenoch previously suggested means-testing the state pension as a way to control spending, sparking backlash from some critics which argued that such a move would undermine the principle of universal support for retirees.
According to the Office for Budget Responsibility (OBR), the state pension system costs UK taxpayers £125bn a year – and that figure is set to rise significantly in the coming decades, which experts at RTS financial planning think “may force the Government into making tough decisions”.
A recent blog post from financial planners RTS touched on this. It read: “The rising costs are unsustainable.
“By 2045, the number of pensioners is projected to skyrocket, and the state pension could swallow an even larger chunk of national spending.”
Poor economy is harming people’s pensions, says former Labour expert
While the triple-lock has improved pensioner outcomes, it is costly and less targeted than some alternatives, it said.
The pledge costs an extra £11bn per year, the Institute for Fiscal Studies (IFS) previously said.
Recent IFS analysis warned that the triple-lock could make pension spending unpredictable and urged policymakers to consider linking pension rises to earnings growth alone.
The Organisation for Economic Co-operation and Development (OECD) has similarly called for reforms to ensure the UK’s pension system remains financially sustainable in the long term.
On the broader pensions landscape, Bell addressed ongoing responses to the inheritance tax (IHT) on pensions consultation.
When asked if there would be any changes to the Government’s approach following the feedback, he said: “We are not going to be changing the approach to the consultation on the detail.
“We’re going ahead with making sure that pensions are used for their intended purpose — the clue is in the title.”
Bell, who was appointed in January this year, described how the Noughties presented a challenge of ensuring that people continued to build up pension savings.
He said: “Policy provided the answer in the form of automatic enrolment.
“Solutions were found, and that should give us confidence for our own challenges today. But … we took too long to find innovation in the face of a chronic problem, rather than a crisis.”
Turning to the current landscape, Bell identified the primary challenge as ensuring pension savers get better returns on their investments.
“I agree the level of contributions is an issue, but … today’s problem is, how do we deliver better returns to savers so they can have a decent standard of living in retirement without asking any more that is necessary of their standard of living in the here and now?”
He stressed that ensuring strong returns is essential before focusing on raising contribution levels, adding: “That’s why phase one of the pension review on the landscape, and the pension bill, will help reduce costs in the system and put accumulation on a firm footing. This must come before phase two on adequacy.”
Warning that the damage caused by poor investment returns should not be underestimated, Bell described it as “just as destructive” as pension scheme failures.
He explained: “The damage done by poor returns, including during the accumulation phase, maybe feels less binary and catastrophic than the risk of Maxwell-style vanished promises. It is a mistake to underestimate its impact on savers.
“So that, for me, is today’s exam question. We’re making good progress, and I look forward to answering it with all of you over the months and years to come.”
M0nica
Well I think the triple lock should go.
Wealthy pensioners always say this.
It sounds rather ‘I’m all right Jack’. I imagine MOnica and her husband have good occupational/private pensions. Many have neither and they scrape by on the SP alone - maybe the old one, which I receive and which is far from generous.
Nothing can be promised "forever and ever" as no one has a crystal ball, but I think its absolutely necessary to make this reassuring commitment clear in the current climate
PoliticsNerd
For those who aren't familiar with Torsten Bell, he was appointed Parliamentary Secretary in HM Treasury and Parliamentary Under Secretary of State in the Department for Work and Pensions on 14 January 2025.
This is a good introduction www.youtube.com/watch?v=O1fEc2hPrI8 It was recorded fife months ago be he got the job in the Treasury.
He has hardly had any experience as an MP before his promotion.
Quite remarkable.
"Torsten Bell is the Labour MP for Swansea West, and has been an MP continually since 4 July 2024. He currently holds the Government posts of Parliamentary Secretary (HM Treasury), and Parliamentary Under-Secretary (Department for Work and Pensions)."
I really do recommend watching the U tube video to help inform about Torsten Bell. Really impressive.
Its his grasp of economics that matter, and has been close to the heart of decision making in the Labour Party for a very long time - given the small numbers of Labour MP's elected in 2019 this is not unusual.
It would be a foolish thing to means test the State Pension when occupational pension funds are so dependent on the performance of the stock market. It is well documented that without Quantitative Easing in 2022, the effect of Kwateng’s announcement of 40 billion of tax cuts would have been to cause pension funds to fail.
The Reform Party contract promise to increase the tax personal allowance to £20,000 in the first 100 days would have been even even more costly. Pension funds would have crashed because Reform want to prohibit QE. Rupert Lowe recently introduced a Ten Minute Bill to this effect - so where would we have been been if millions of pensioners had already lost their SP to means-testing?
Here we go again. Soon we will have absolutely nothing coming in despite working ALL OF OUR LIVES from the age of 15 years and paid a full stamp the old whole time. We have not all just rocked up on this island and are claiming and receiving everything. I like others are on the older pension, no I do not get pension credit and if you took away my OAP which is my right as have paid into it, I like others would starve. Is this how a political party for the people behave.
He’s got a lot of experience as an economist though, Allira. He was Chief Executive of the Resolution Foundation, which is an independent think-tank focused on improving living standards for those on low-to-middle incomes, for nine years. I think he’s probably better qualified for the job he is now doing than most MPs with more parliamentary experience would be.
My SP is nowhere near £1900 pm. That’s because I worked part-time for a short period of time and did not pay NIC - as they say, you get what you pay for, so I’m not complaining .
I have no idea where you get £1900 per month from
It is nowhere near what or my OH receive from SP! I am on old rate and he is on the new rate!
Some scare mongers here !!!
I shall contact my excellent MP for clarification 👍
crazyH
My SP is nowhere near £1900 pm. That’s because I worked part-time for a short period of time and did not pay NIC - as they say, you get what you pay for, so I’m not complaining .
Did you men to post on the thread about someone receiving £1,900 a month for herself and daughter who are both disabled.
Or about the projected rise in State Pension of £1,900 over the term of this government i.e. over five years.
Galton
Here we go again. Soon we will have absolutely nothing coming in despite working ALL OF OUR LIVES from the age of 15 years and paid a full stamp the old whole time. We have not all just rocked up on this island and are claiming and receiving everything. I like others are on the older pension, no I do not get pension credit and if you took away my OAP which is my right as have paid into it, I like others would starve. Is this how a political party for the people behave.
Nobody is threatening to take away your OAP Galton. What gave you that idea?
In answer to your question, no, it is not how the LP behave - it is Kemi Badenoch who has mooted means-testing, not Keir Starmer. If you read the OP, you will see that the government is letting people know that the triple lock is safe for this parliament, and that they will not be means-testing State Pensions.
Anyone who has worked all of their lives and paid full stamp from 15 to retirement will get a pension - I have no idea what is making you think otherwise.
What they are not doing is protecting those with occupational pensions from the impact of taxation, however. Someone who has not paid into an additional pension but has a full NI record will get 100% of the SP, whereas anyone with an additional income of over £12500 will lose 20% to tax (or more, if they have higher amounts coming in). That does seem to penalise people for making provision for older age.
I would like to see the personal allowance increased, or a rate of (say) 10% to bridge the gap between those bringing in £12500 and £50250. That is a big gap, so maybe a tax of 10% on sums between £15000 and £30k and then 20% up to £50k would be fairer. This should apply to earnings as well as pensions - I don't think that pensioners should be treated differently from workers in this regard.
Wyllow3
I really do recommend watching the U tube video to help inform about Torsten Bell. Really impressive.
Its his grasp of economics that matter, and has been close to the heart of decision making in the Labour Party for a very long time - given the small numbers of Labour MP's elected in 2019 this is not unusual.
Well, I watched it, waiting for his 'grasp of economics' to be displayed and all I saw was 30 minutes of waffle. We did get a few seconds on his ideas on taxing wealth, but they certainly haven't had any influence in the months since that programme was made, in fact his boss has backed away rapidly from any notion of doing it, apart from a couple of token gestures.
A Treasury man with a conventional narrative. If he weren't he wouldn't be where he is now. I don't expect Bell to change anything.
Believe it if you like Currently if Labour told me my name Id have to check my birth certificate!
Allira
^The state pension will not be means-tested under Labour, Pensions Minister Torsten Bell has confirmed^.
Oh dear, that means it probably will be in a few months' time.
Watch this space. ☹
If it’s like the other we wouldn’t do it messages, you could be right, but I really hope not.
Words like targeted, better and focused, seem quite worrying to the less well off that they are predicted to benefit.
M0nica
Well I think the triple lock should go.
Why?
They've said things like this before and gone back on their word. They should not target disabled people they should target the unemployed first.
Neither of those things have anything to do with the pension.
Why do people always have to rain on any parade?
Just ride the noise Doodledog, it’s the only way. I’m sure none of the gripers will turn down this, or any future, rises to their pensions.
When I was very young my Grandmother retired. She sat us down to explain why she would no longer be able to take us out as she had done because she had a lot less money coming in but the same amount of bills etc to pay out. I asked my Mother why this was & was told it was down to the government. Same situation when Mum got her pension & again when I got my pension after years of Medical Retirement. So nothing changes for anyone when they get old does it?
He lies! They all do!
SillyNanny321
When I was very young my Grandmother retired. She sat us down to explain why she would no longer be able to take us out as she had done because she had a lot less money coming in but the same amount of bills etc to pay out. I asked my Mother why this was & was told it was down to the government. Same situation when Mum got her pension & again when I got my pension after years of Medical Retirement. So nothing changes for anyone when they get old does it?
Well no. It has never been the case that pensions are the same as salaries. They are meant to help people to make up the difference between what they have saved and what they need. It is not 'down to the government' if people expect to leave work and have the same income as before.
That has never changed, and is unlikely to do so, which is why people are encouraged to take out workplace pensions.
Hear hear EkwaNimitee! I’m 65 and have worked all of my life I’m waiting for mine in 10 months time.
Well, I'm on the old SP so (with a bit of Graduated Pension added) am £1,660 p.a. less well-off than those on the new one. Yes, I have an occupational pension, considerably reduced due to having to retire 5 years early, but have paid NI since I was 16 - and because I was also self-employed for many years, paid Class 2 and 4 for a lot of that time, up to age 65, none of which gave me any extra pension.
Every year I drop further back cos as my dad used to say "10% of a lot ain't the same as 10% of a little".
However, I am comfortably off for other reasons so can't complain too much, but is is not equitable.
There will be millions of other pensioners stuck on the old pension system with small occupational pensions that will mean they can't claim pension credit and all its "add-ons".
In the 1980s, as an accountant, I did some volunteering advising women bringing up children alone (due mostly to DH having left and not paying maintenance) and was amazed to see how many differences there were in the benefits these women could claim depending on minor differences in their situations. I learnt that the whole benefits system was in need of starting from scratch. It still is.
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