State pension set to rise by 4.1% and benefits by 1.7% from April 2025

daveyjp

westv said:

Is 1.7% the rate that will be used for public sector pension increases?

There is no single public sector pension.  Each one will have different rules.

Dazed_and_C0nfused

la531983 said:

Dazed_and_C0nfused said:

la531983 said:

westv said:

Is 1.7% the rate that will be used for public sector pension increases?

No, the March figures are used for those.

Is that new 🤔

Well I went and checked my own statement and 10.1% was added onto my balance last year, and that was the inflation figure for March 2023. So I only speak as I find.

That was also the September 2022 rate though.

I doubt the March figure can be used as it isn't released until after the increase is added to the pensions in payment.

Exodi

FlorayG said:

Well that's nice for me as I'm a pensioner; but UC is way too low in the first place and 1.7% surely is not in keeping with cost of living rise?

Unfortunately there's no magic money tree so giving more money to anyone comes at the expense of someone else (though one may opt to revert to the easy default faceless target 'the rich', despite already contributing the  vast majority of tax revenue).

Given the budget is around the corner which looks set to increase employers NI (which has an indirect impact on employees (direct in the case of sal sac), despite Labour pretending it won't) I can't see there will be much appetite among taxpayers to provide bigger increases to welfare, though I'm sure there are people who disagree.

la531983

Dazed_and_C0nfused said:

la531983 said:

Dazed_and_C0nfused said:

la531983 said:

westv said:

Is 1.7% the rate that will be used for public sector pension increases?

No, the March figures are used for those.

Is that new 🤔

Well I went and checked my own statement and 10.1% was added onto my balance last year, and that was the inflation figure for March 2023. So I only speak as I find.

That was also the September 2022 rate though.

I doubt the March figure can be used as it isn't released until after the increase is added to the pensions in payment.

My statements are always backdated a year, so this isnt an issue I guess. The 10.1% was only added to the one I received a few weeks back.

huw01

Am I correct in saying that the 1.7% rise will apply to the LGPS from April 2025 ?

Nebulous2

huw01 said:

Am I correct in saying that the 1.7% rise will apply to the LGPS from April 2025 ?

Yes - that's my understanding. I'm in Scotland, where there are some differences, but I expect my LGPS to go up by 1.7% for the next financial year. 

I've had a couple of meaty rises in the last two years, well above what my previous colleagues achieved in payrises, so I can't complain. 

speedyrite

Another point worth noting is that the 8.5% increase to the new State Pension for the current year (2024/25) only applied to the Full Rate part of the payment.

All additional amounts on top of the new State Pension Full Rate (i.e. protected payment, increments - own based on deferred new State Pension, increments - inherited based on deferred old state pension) increased by 6.7%.

Likewise, additional amounts on top of the old State Pension (i.e. Additional pension and many of the other possible increments) also increased by 6.7% (except for Contracted-out deduction from AP in respect of contracted-out earnings from April 1988 to 1997 which got a 3% increase and Contracted-out deduction from AP in respect of pre-April 1988 contracted-out earnings which got a Nil increase).

So beware that the 4.1% announced today won’t necessarily apply to the WHOLE amount of your State Pension. You will need to look at your annual increase letter to see how the total payment is arrived at in terms of Full rate (New SP) or Basic amount (Old SP) plu any extra bit!

xylophone

Re increase on public sector pensions in payment.

https://commonslibrary.parliament.uk/research-briefings/sn05434/

Statutory requirement to increase public service pensions

There is a statutory requirement to increase the main public service pensions in payment each April in line with prices. The requirement is for the increase to be at the same rate as the additional State Pension, now measured according to the annual increase in the Consumer Prices Index (CPI) in the year to the preceding September.

michaels

hugheskevi said:

It is interesting to note that between 2010-25 State Pension has tracked RPI almost exactly.



If no changes to uprating had been made in 2011, and simple statutory increases were applied each year (RPI uprating with a floor of zero) the rate of State Pension would be higher today than it is, despite the Triple Lock.

Over the longer 2001-25 period State Pension has comfortably outpaced all of RPI, CPI, and earnings. 

What is very striking is the terrible performance of average earnings growth between 2010-25, where it barely kept pace with CPI.

However RPI is not a valid statistical measure as it basically assumes that people do not change behaviour in response to changes in relative prices.  Hence CPI is the more relevant comparator.

Which is not to say that real earning only keeping up with prices is not a very poor result compared to historic periods.  unfortunately with our judging governments by GDP (and not even GDP per head), that is therefore the statistic they concentrate on.

Silvertabby

xylophone beat me to it.  All public sector pension schemes increase each April in line with the CPI figure from the end of the preceding September.

The only difference is when someone retires part way through the previous year, when the increase applied will be pro-rata.