State pension set to get ‘substantial increase’ next year but thousands will miss out | Personal Finance | Finance
The Government policy guarantees that the state pension must go up in line with the rate of inflation, average earnings or by 2.5 percent. The triple lock was temporarily frozen as earnings were inflated after the Covid furlough scheme, but the mechanism is set to return next year.
With inflation at more than nine percent and set to hit 11 percent by the end of the year, the amount that state pensioners receive could soon have a large boost.
However, thousands of pensioners could miss out on the rise as the amount they receive is frozen.
Britons have to live in certain countries to benefit from the increase.
These include countries within the European Economic Area, Gibraltar, Switzerland and countries that have a social security agreement with the UK. although people living in Canada and New Zealand will not see an increase.
People living in Canada and New Zealand will also not see an increase.
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How much state pension a person gets depends on their National Insurance record, with 10 years usually needed to get any state pension.
To access the full basic state pension, people usually need a total of 30 qualifying years of National Insurance contributions or credits.
For the new state pension, a person would need 35 qualifying years if they did not make National Insurance contributions or get National Insurance credits before April 6, 2016.
Many financial experts have hit out at the Government’s decision to pause the triple lock as pensioners have lost out on hundreds of pounds which could have helped them during the cost of living crisis.
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Adrian Lowery, a financial analyst at wealth management firm Evelyn Partners, said: “Thanks to the reinstatement of the state pension triple lock, the next financial year’s full state pension will go up by this September’s rate of consumer prices index inflation.
“With CPI inflation at 9.1 percent in May, and forecast to top 11 percent in October, that should make for a very substantial increase.
“There are not many other sources of income so tightly tethered to the cost of living.”
Britons are able to access their state pension and claim payments once they reach state pension age, which is 66 at the moment.
