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State pension likely to rise by 3.9% after key data released - but most will be taxed
The rise would add about £488 a year and push the full new state pension above the frozen personal allowance, officials said.
- On Tuesday, the Office for National Statistics reported average wage growth of 3.9%, triggering the triple lock for next April. The new state pension will likely rise to around £13,036, exceeding the frozen £12,570 personal allowance for the first time.
- Under the triple lock, the state pension increases annually by whichever is highest of wage growth, inflation, or 2.5 per cent. With earnings rising 3.9 per cent between May and July, this figure is set to determine the April uplift.
- Sir Steve Webb of consultancy Lane Clark & Peacock warned government exemption plans are "a mess" that could protect only one in 16 retirees. Many pensioners face new tax liabilities as the pension crosses the threshold.
- Pensions Minister Torsten Bell reconfirmed work is underway to protect pensioners reliant solely on state benefits from tax. Chancellor John Healey will outline the specific delivery mechanism in the October Budget.
- Ruth Curtice of the Resolution Foundation warned the triple lock creates a "ratchet effect" as pensions rise faster than typical earnings. Concerns regarding fiscal sustainability remain significant ahead of the Budget.
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British state pensions are set to rise by 3.9% from next April under the triple lock system, which would see the new full pension itself exceed the tax-free income threshold for the first time. The situation poses a serious dilemma for the government, as the frozen tax-free threshold would force some pensioners to pay income tax, the Financial Times reports.
·Budapest, Hungary
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State pension rises while youth unemployment goes up
State pensions are set to rise by nearly £500 a year - in line with the current increase in wages. But that jump means that even someone who only receives a full state pension would be liable to income tax. Government ministers say that won't be allowed to happen.
·London, United Kingdom
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Coverage Details
Total News Sources72
Leaning Left7Leaning Right5Center38Last UpdatedBias Distribution76% Center
Bias Distribution
- 76% of the sources are Center
76% Center
14%
C 76%
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