Published On: Mon, Sep 30th, 2019

Is the state pension rising? How much more you could get amid bumper rise news | Personal Finance | Finance

The state pension increases each year, and the process of the rise is known as the triple lock. For both the basic and new state pension, the amount increases each year by whichever if the highest of three different factors. These are earnings (meaning 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), or 2.5 per cent. The uprating of the state pension comes into effect in April each year.

According to analysis for the Daily Express by insurance giant Aegon, the earnings growth figure means pensioners are on track to receive a four per cent boost.

According to the analysis, state pensioners could end up being £351 better off per year.

But, there were warnings last night that the triple lock may end up being too expensive for future Governments to guarantee.

Without the triple lock, the cost of the state pension is projected to increase by £21 billion between 2020/21 and 2060/61.

Figures from the Office for Budget Responsibility show that with the triple lock, the increase is projected to be £35 billion for the same period.

The full new State Pension is currently £168.60, while the maximum available on the basic state pension at the moment is £129.20 per week.

State pension claimants who permanently live overseas may or may not get an uprated state pension each year.

The state pension will only increase each year if one lives in the European Economic Area, Gibraltar, Switzerland, or countries that have a social security agreement with the UK – but excluding Canada or New Zealand.

If a person returns to live in the UK, then their state pension amount will go up to the current rate.

The government website details the list of countries where it does pay the annual increase in the state pension.

Earlier this month, the Government confirmed that those who live overseas full-time in EU countries and claim the state pension will continue to get the annual increase for the next three years, in the event of a no-deal Brexit.

Amber Rudd, who was Work and Pensions Secretary at the time, said: “This government is working hard to prepare for leaving the EU on 31 October, whatever the circumstances.

“We will be fully ready for Brexit, and are leaving in a way that protects the interests of citizens here and in EU member states.

“This guarantee will provide reassurance to the hundreds of thousands of people living in the EU who receive a UK State Pension that their pensions will continue to rise significantly each year, however we leave.”

During this three-year period, the UK government said it plans to negotiate a new arrangement with the EU, in order to ensure the uprating continues.

This week, the government is sending out letters to the pensioners living overseas in EU countries outlining the plans to continue the increases even if the UK leaves the EU without a deal.

Work and Pensions Secretary Dr Thérèse Coffey said: “Pensioners in Europe who have paid into the system for years deserve peace of mind over their future finances.

“Not only are we providing much-needed reassurance for hundreds of thousands of retirees, we’re ensuring we are fully prepared for leaving the EU on 31 October.

“No matter the circumstances of Brexit, we’ve made sure that pensioners do not need to take any action to continue receiving their hard-earned State Pension.”

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