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Glass jar with pension savings British Expats See Pensions Rise As New Rates Come Into Force Spain News

From Monday, April 12, British pensioners will see their incomes rise by 2.5%, as state pension rates are increased by The UK’s Department for Work and Pensions (DWP).

As new rates come in to force across England and Wales, millions of people will benefit from the rise, with the average retiree receiving an extra £4.40 (5 euros) a week.

Those over the age of 66 who receive the full, new state pension will see it increase from £175.20 to £179.60 ( 207.44 euros – 238.55 euros). This growth equates to an extra £17.60 (20 euros) a month, £228.80 (263 euros) for the 2021/2022 financial year.

People on the ‘old’ basic State Pension (category A or B), will see a weekly increase of £3.35 (3.85 euros), this is a raise from £134.25 (154 euros) each to £137.60 (158 euros). This will give them an extra £13.40 (15.41 euros) a month or £174.20 (200 euros) for the 2021/2022 financial year.

At the time of writing £1 was valued at 1.15 euros.

The yearly increase is linked to the “triple lock” which was brought in, in 2010 to help safeguard pensioners from any increases below the cost of living. The ruling means that pensions payments must increase each year by whichever is highest, the average UK earnings growth, the CPI (Consumers Price Index measure of inflation) or 2.5%.

The 2.5% increase means that anyone who retired before 2016 will now receive £137.60 and newer retirees will get the basic rate of £175.20.

The total amount you receive, however, will depend on your national insurance credits. To qualify for the full state pension, you need to have accumulated 35 credits over your working life - that’s 35 years of work.

Work and Pension Minister Thérèse Coffey said when announcing the increase, "State pensions will be increased by 2.5%, in line with the Government’s manifesto commitment."

She also added that "The Standard Minimum Guarantee in Pension Credit will also increase by the same cash amount as the basic State Pension, rising by 1.9%.

In recent months there have however been calls to scrap or modify the triple lock amid fears that it could become too expensive to maintain because of the emergency cost of the Covid pandemic.

Sarah Coles, finance analyst at Hargreaves Lansdown said: “The state pension is the bedrock of most people’s retirement income, so the triple lock is incredibly valuable. It protects millions of pensioners from the threat of rising bills. However, it’s already under pressure now, and we can expect it to be even more so next year. When the government measured wage inflation this time around, many people had taken short term pay cuts and huge numbers were on furlough, so they were earning less than usual. This meant wages had fallen over the previous 12 months.

In principle, if wages return to pre-covid levels this year, pensioners could see their incomes increase at a much higher rate next spring.

Source

https://www.euroweeklynews.com/2021/04/12/british-expats-receive-pension-rise-as-exchange-rates-fall/
https://www.mirror.co.uk/money/state-pension-payments-rise-up-23896882