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State pension rises 2.5% as pension lock broken

State pension rises 2.5% as pension lock broken

The government has confirmed that the state pension will rise by 2.5% from April 2022, breaking the pension lock as a result of the impact from the pandemic.

The minister, told MPs that this would be a one-year intervention and that the normal increase in line with average earnings increase would be reinstated from the 2023-24 tax year.

As last year, once again the state pension will rise at a fixed rate below the RPI rate of inflation.

Thérèse Coffey MP, Secretary of state for work and pensions said: ‘[Last year], we legislated to set aside the earnings link, allowing us to award an uprating of 2.5% as this was higher than inflation. If we had not done this, state pension would have been frozen.

‘So, I will introduce the Social Security (Up-rating of Benefits) Bill. For 2022/23 only, it will ensure the basic and new state pensions increase by 2.5% or in line with inflation, which is expected to be the higher figure this year. And as happened last year, it will again set aside the earnings element for 2022/23, before being restored for the remainder of this parliament.’

In addition to those receiving basic and new state pensions, this will apply to those receiving standard minimum guarantee in pension credit and widows’ and widowers’ benefits in industrial death benefit.

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About the author

Andrew is the Operations & Business Advisory Director at Ward Williams Ltd having partner responsibility for a portfolio of owner managed business clients covering a wide spectrum of different industries, and which are primarily based around the Weybridge and Bracknell areas. He oversees the Business Services department processes for the timely delivery of year end accounts, tax compliance and company secretarial services.

He has extensive experience of providing accounting, VAT and business tax advice tailored to individual and corporate needs. Andrew can assist in identifying and delivering strategic tax planning solutions. As he acts for a number of property clients, this is one area of specialist interest. He also provides financial and accounting solutions to start-up's, owner managed enterprises and small groups.

Andrew’s primary goal is to provide a prompt and client focused service delivering tangible benefits through providing solutions to client problems and through identifying opportunities to assist in the growth and development of their business.