What Date Does The State Pension Increase?
How much will local government pensions increase in April 2023?
Local Government pensions will increase by 10.1 per cent. We adjust pension benefits in April each year to reflect the cost of living. This includes pension accounts for contributing members, benefits on hold pensions and pensions in payment. The amount of the adjustment is normally based on the September to September change in the Consumer Price Index (CPI) and applies to your pension from the following April.
- If you have received your pension for less than 12 months you will receive a proportional adjustment.
- We apply pension increases on the first Monday on or after the start of the tax year.
- Therefore, you will receive a partial increase to your monthly pension payment in April, with the full increase coming through in the May payment.
The State Pension will also rise by 10.1 per cent. If you have already claimed your pension, see How your pension keeps pace with inflation to find out more. If you are still paying into your pension, see What benefits you build up to find out more.
How much will local government pension rise in 2023?
Annual Pension Increase and CARE Revaluation Local Government Pension Scheme pensions are increased based on Pensions Increase (Review) Orders and Guaranteed Minimum Pensions Increase Orders which are set out by HM Treasury. The Pension Increase Order is currently linked to CPI (Consumer Prices Index) as at the previous September.
- Deferred and Pensioner Members It has been confirmed that the increase for 2023 will be 10.1% for those who will be paid the full increase.
- This will be applied to your pension from 10 April 2023.
- For those whose benefits are in payment, you will notice a partial increase in your April payment.
- This is because your pension is due to be increased with effect from 10 April 2023 and as such your payment for April will be based on both the pre and post increase amounts.
Your payment with effect from 1 May 2023 will have the full increase applied. A posted payslip will be issued to you for April 2023 as it contains a partial increase payment and also again in May to notify you of fully increased monthly payment. Pension increases are normally paid to: · pensioners who are aged 55 or over · pensioners who retired through ill health at any age · spouses and dependants of former pensioners · If your pension has been in payment for less than a year, you will receive a proportioned increase. Active Members CARE (Career Average Revalued Earnings) pensions are adjusted based on the Treasury Revaluation Order index. The benefits you have built up with effect from 1 April 2015 will therefore be increased 10.1%. If your active scheme membership is for less than a year, you will receive a proportioned increase this year.
How much will local government pensions increase by in April?
Want to know more?
|10.1 per cent
|3.1 per cent
|0.5 per cent
|1.7 per cent
What will the UK official pension increase be in 2023?
Pensions Increase 2023 – FAQ 09/04/2023 The Pensions Increase for this year is 10.1% and is payable from Monday 10th April 2023, The full effect can be seen from May 2023,
What is the state pension forecast for 2024 UK?
Triple lock to provide ‘substantial’ rise in state pension for second year running State pensions are set for a “substantial” 8.5 per cent increase in April 2024 under the triple lock mechanism, with the new state pension set to rise just over £900 per year to over £11,500.
Under the triple lock, the basic state pension received in retirement rises each year in line with whichever is the highest out of three factors: wage growth, inflation or 2.5 per cent. The latest update from the Office for National Statistics (ONS), which is used as part of the triple lock calculation, revealed that annual growth in employees’ average total pay in May to July 2023 was 8.5 per cent, given the NHS and Civil Service one-off payments made earlier this year.
Basing the triple lock on these figures would see the full new state pension rise from £203.85 per week to £221.20 per week, while the full basic state pension would rise from £156.20 per week to £169.50 per week. Whilst next month’s inflation data will also be a factor, industry experts have suggested that even if this were to rise slightly by the time of the September figure, it would probably still be lower than the earnings growth figure.
The increase is expected to be a boost for many pensioners, with Aegon pensions director, Steven Cameron, pointing out that, if the government delivers on its pledge to halve inflation to 5 per cent by the end of the year, the increase will “pack a positive punch for pensioners’ purchasing power”. This was echoed by AJ Bell head of retirement policy, Tom Selby, who pointed out that the latest increase also comes “hot on the heels of the bumper 10.1 per cent state pension increase applied in April this year, in line with inflation in the prior September”.
“Retirees are set to receive their second blockbuster state pension increase in a row as a result of the government’s ‘triple-lock’ policy,” he continued. “For those in receipt of the state pension, the protection provided by the triple-lock is extremely valuable.” However, LCP pointed out that, with the personal tax threshold due to be frozen again at £12,570 next year, a large pension rise, coming on top of last year’s 10.1 per cent rise, will drag many more pensioners into paying income tax.
Rising costs, rising concerns Industry analysis also recently revealed that having already raised state pension spending by around £11bn a year compared since 2010. Time for a new approach? “Without such an approach each time the uprating of the state pension occurs a dividing line will be drawn setting generations against each other,” he added, arguing that this is a subject that will be further pressed in the coming months as election campaigning kicks off.
However, industry experts have also raised concerns as to whether the triple lock will be upheld, with some speculation that the government might opt to use a lower figure, such as the current inflation figure of 6.8 per cent, for the April 2024/25 uprating.
Hargreaves Lansdown head of retirement analysis, Helen Morrissey, also noted that whilst this increase will be welcome news for pensioners, “it will continue to be a headache for government who need to battle the ever spiralling cost of the state pension bill”. And this could be set to grow further, as the Institute for Fiscal Studies (IFS) associate director, Jonathan Cribb, pointed out that, compared with the OBR’s forecast from just six months ago, today’s figures mean spending on the state pension is set to increase by another £2bn in 2024–25.
‘These increasing public finance pressures caused by the triple lock, especially in periods of macroeconomic volatility as we have experienced in recent years, risk the sustainability of the state pension system, meaning heightened uncertainty for individuals planning their retirement finances,” he stated.
However, LCP partner, Steve Webb, suggested that there are several reasons why the government is likely to stick with the earnings growth figure in line with the ‘triple lock’ policy, explaining that the savings from breaking the triple lock would be relatively modest compared with the political challenge.
Regardless of desire, timing could also prove an issue, as Webb noted that breaking that link would therefore require legislation and the government might struggle to get such legislation through, especially in the final uprating before an expected Autumn 2024 General Election.
Webb stated: “With a General Election in the offing it seems quite inconceivable that the government would choose to break the triple lock promise for a second time in three years. “Such a decision would be like aiming a laser-guided missile at the core of Conservative support and could fatally undermine the party’s electoral prospects.” However, Webb acknowledged that it is “far less clear” as to what each party will do when it comes to their manifesto.
There are other options available to government though, as Cameron suggested that one fairer and less unpredictable option would be to move away from a year-on-year comparison of earnings, inflation and 2.5 per cent to one which averages out across say three years.
In addition to this, Morrissey said that increasing the state pension age is another lever government can pull to manage these costs. “But this needs to balanced with people’s ability to keep on working and people need certainty of when they will receive their state pension to help them plan,” she added.
“A review of the long-term direction of the state pension and the triple lock’s role should be a priority for whoever wins the next election.” Calls for a broader review were echoed by Fidelity International head of pension products, James Carter, who said that the “real question” is whether the triple lock remains a viable long-term solution.
- Now is the time to consider the right and stable basis for the future of the UK state pension so consumers have certainty,” he continued.
- We live in a more volatile economic and political environment and a resilient future strategy is needed.
- To achieve this, one cannot consider the role and level of the state pension in isolation.
“A broader review of the UK pension system is required, taking into account the state pension alongside the development of the automatic enrolment regime. “Considerations must be made towards both eligibility for automatic enrolment, how the coverage and quantum of contributions might increase in the future and how workplace pensions together with the State Pension can provide fair and adequate retirements.” Quilter head of retirement policy also suggested that, “arguably there should be agreement on the level of the state pension and separately a fair mechanism for ensuring its value is maintained overtime”.
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