Money
Paul Lewis on the web
Council tax to rise by more than pensions
Government figures show council tax rising by a bigger percentage than the rise in the state pension. In the pre-Budget report the official figures show council tax receipts going up by 5% next year. But the index used to put up pensions rose by just 3.9%, writes Paul Lewis
If the Government figures are right that would see the average council tax rise by £55 a year to £1156. And the tax on a typical Band D home would increase by £66 to £1387. The Government claims these figures should not be used and says it "expects…the overall council tax increase to stay well below five per cent in each of the next three years." But already council chiefs are saying that the money the Government has promised them is not enough to keep council tax rises down unless they cut vital services.
Using the inflation figures published this week the Basic State Pension will rise by £3.40 a week to £90.70 a week from April 7, 2008. The pension paid to a married woman on her husband’s contributions will go up by £2.05 to £54.35 making a total pension paid to many couples of £145.05, a rise of £5.45. These rises follow the increase in the Retail Prices Index for September announced on Tuesday which was 3.9%. These figures are still estimates pending the statement from Work and Pensions Secretary Peter Hain expected shortly.
The only rates we have definite news on are those for Pension Credit which were announced by the Chancellor last week. He said "The Pension Credit for older people…will rise by £5 a week from next April – £260 per year – for a single person; and by £7.65 per week and £397 per year for a couple guaranteeing every person over 60 at least £6,450 a year." An extra £5 is an increase of 4.2% which is more than the 3.5% rise in average earnings to July which is normally used to put up pension credit. That would have meant a rise of £4.15 a week for a single person but for reasons still to be explained the Chancellor decided to boost that to a fiver.
The new rates
Basic State Pension is expected to rise by £3.40 a week to £90.70 for someone who has a full contribution record. A woman claiming on her husband's contributions should get £54.35 a week, a rise of £2.05.
Pension credit will rise by £5 a week for a single person to £124.05 and for a couple will be £189.35 a week, a rise of £7.65. People under 60 who are not working will get a smaller increase.
Their weekly income support is expected to rise by £1.75 a week to £60.90 if they are single or £2.80 a week to £94.95 for a couple. Some of these rates are estimates based on the official rules and expected to be confirmed in the next couple of days.
