State pension increase

agent69

So I've just received a letter from DWP regarding state pension increases from7th April. I have a full pension plus a top up, which I believe was called SERPS at the time (now appears to be called protected payment).

So why does the state pension increase by 4.1%, but the PP only goes up by 1.7%?

molerat

Anything additional to the basic pension amount, both under the old and new schemes, only increases with CPI.

spreadsheeterapple

Because only the state pension itself is triple-locked, whereas all other benefits are uprated by CPI which was 1.7% on its qualifying date (September I think).

When we were paying in way back when, there was no guarantee given for what the level of annual increases would be.
- State Pension has only had this Triple Lock political promise since 2011, brought in by the 2010 government. Multiple reports state this has to end asap, as it is unsustainable, unaffordable.
- Previously for 1980-2011 the increase was by prices; it was RPI used early on as CPI didn't exist before 1996.
- Before 1980 the increases were by earnings.

So, changes have happened several times, and anything could now happen, i.e. any change could be brought in at any time.

agent69

molerat said:

Anything additional to the basic pension amount, both under the old and new schemes, only increases with CPI.

Thanks for that. No triple lock, just CPI.

pterri

As if by magic,,,,

hugheskevi

spreadsheeterapple said:

- Previously for 1980-2011 the increase was by prices; it was RPI used early on as CPI didn't exist before 1996.

It was RPI until 1999, except for an additional 50p per week in 1994 to compensate for the introduction of VAT on fuel.

From 1999 to 2011 it was uprated by a minimum of RPI, but ad hoc increases above RPI were common. From 2011 it was changed to triple-lock, with CPI replacing RPI as the measure of price change.

The chart below shows that between 2001 to 2010 the Basic State Pension increased by considerably more than CPI or RPI, but by less than earnings.

spreadsheeterapple said:

- State Pension has only had this Triple Lock political promise since 2011, brought in by the 2010 government. Multiple reports state this has to end asap, as it is unsustainable, unaffordable.

Since the introduction of the Triple Lock, the triple-locked State Pension has outpaced CPI and earnings but has coincidentally increased pretty much in line with RPI. 



Over the full 2001-2025 period, State Pension has outpaced all of CPI, RPI, and earnings. 24 years is a long time to sustain such levels of increases, particularly when the pensioner population has been rising despite the increases to State Pension age.