Both the basic and the new state pension rises each year, according to the triple lock. This means that it rises every year by whichever is the highest out of the average percentage growth in wages in Great Britain, the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI), and 2.5 percent.
- State pension: How will payment dates change this month?
The changes will comes into effect in April 2020, when the full rate of the UK’s new State Pension will increase by 3.9 percent to £175.20 per week.
Currently, the full new state pension is £168.60 per week.
This increase means those getting the full new state pension will get an extra £6.60 per week – which works out at an additional £344 a year.
Meanwhile, the full weekly rate of the basic State Pension is set to increase by £5.05 per week from £129.20 to £134.25 per week.
However, not everyone will be able to get the full state pension.
The new State Pension takes National Insurance records into account, and some people will receive more and others less than the full amount.
For those who retire overseas, it’s possible to claim the state pension in most countries.
However, the state pension will only increase each year if the claimant lives in:
- The European Economic Area (EEA)
- Countries that have a social security agreement with the UK (but a person cannot get increases in Canada or New Zealand).
Gov.uk states that a person will not get yearly increases if they live outside of these countries.
Should they return to live in the UK, the recipient’s pension will go up to the current rate.
The Government has confirmed that other payments are set to rise in April 2020, confirming that it would not extend the benefits freeze which was due to end next year.
From April 2020, working-age benefits will rise by 1.7 percent, in line with inflation.
- Universal Credit payment will change in 2020 – will you get more cash?
According to the DWP, around 2.5million people on Universal Credit will see their payments rise by this amount, with the increase estimated to benefit more than 10million people.
Working-age benefits such as Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Housing Benefit, Universal Credit, Child Tax Credits, Working Tax Credits and Child Benefit, have remained at the same level since April 2015.
Despite the upcoming rise, research from the Resolution Foundation has found that some people affected by the freeze will still be hundreds of pounds worse-off by.
According to the Foundation’s analysis, the freeze reduced the real-terms value of working-age benefits by six percent since 2015, and left the average couple with children in the bottom half of the income distribution £580 per year worse-off.
But while the benefit freeze is over, its impact is here to stay with a lower income couple with kids £580 a year worse off as a result.
Adam Corlett, Senior Economic Analyst at the Resolution Foundation
Commenting on the rise by inflation rates back in October this year, Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said: “Today’s inflation figures have confirmed that working-age benefits received by millions of families are set to rise in line with prices by 1.7 percent next April.
“This is their first cash increase in five years.
“But while the benefit freeze is over, its impact is here to stay with a lower income couple with kids £580 a year worse off as a result.
“And because benefits will only keep pace with rising prices, the social security safety net will continue to erode – falling further behind earnings and the state pension.”Source: Read Full Article