The Government has promised to increase the state pension by the annual percentage rise in earnings or by prices as measured by the consumer price index (CPI) or by 2.5%, whichever is highest – an arrangement called the ‘triple lock’.
In the past 12 months earnings rose by less than 1% but annual CPI inflation rose to 2.7% in September, so it is being used as the basis for the 2014 rise in the basic state pension.
The married woman’s category B pension will grow by £1.80 to £67.80. Graduated pensions and earnings-related SERPS and S2P additional pensions should also all rise by 2.7%. Pension credit is expected to rise by rather less than that.
Are you one of the women disadvantaged by the changes to state pension age?
Many other benefits will increase by just 1% as they are no longer linked to inflation, but disability, carer’s and bereavement benefits and premiums should rise by 2.7%.
* This article first appeared in the December 2013 edition of Saga Magazine, where you can read Paul Lewis's money articles every month.
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