Quick State Pension Question..

billymadbiker

Hi,
I have just checked my state pension summary on the gov.uk website.

I need to contribute for another 20yrs then in 2046 I should get £160p/w.
(based on my previous contributions I will only get £69p/w)
Just wanted to check, I presume this £160p/w will be linked to inflation?
So, in 2046 I will still be able to buy what I can buy with £160 now?

Thanks!

Alter_ego

In theory yes, in practice it doesn't work like that.

eg. When I first started work I could buy 40 Mars bars for £1 and they were about 40% larger, now I can probably buy 2 smaller ones.

JezR

By current law new state pension rises are linked to the increase in income.

By current government policy, they are linked also to the CPI if greater and a floor of 2.5%.

What may happen between now and 2046 is anyone's guess.

IanSt

billymadbiker wrote: »

Just wanted to check, I presume this £160p/w will be linked to inflation?
So, in 2046 I will still be able to buy what I can buy with £160 now?

There is currently a triple lock on the minimum amount that the pension is increased every year. Inflation is one of these, so currently yes it will always be increased by at least inflation.

A future government could change the method by which pensions are increased, but given that a lot of pensioners vote, it could be similar to turkeys voting for Christmas!