The government has this week confirmed the government pension review, with an undertaking to re-establish the link between the basic state pension to earnings from April 2011. It has promised that, as a result, pensioners can factor an additional 2.5% on the basic state pension into their pension planning.
The link of government pensions to wages and inflation will be enshrined in a newly-announced Pensions and Savings Bill . The announcement stated: “We will restore the earnings link for the basic state pension from April 2011, with a ‘triple guarantee’ that pensions are raised by the higher of earnings, prices or 2.5%.’ The benefits of the new link will begin in 2012 rather than 2011.
This will mean that, from April 2012, the new government pensions are likely to be at least £100 per week for a single , compared to the current level of £97.65, and £160 for a couple (currently £156.15).
The link between government pensions and average earnings had been in place in the 1970s, but was broken when Margaret Thatcher linked the basic state pension to retail prices, in the form of the retail price index, in 1980. As prices tend to trail inflation and earnings, the true value of pension income from government pensions has gradually dwindled since then. For that reason the re-link to inflation is seen by government pension experts as a ‘stop the rot’ measure.
The new link to wages and inflation is expected to be worth £600m per year in pension income to those drawing the basic state pension.
i cannot make out, why we are constantly told the goverment cannot afford the pensions , and we are living to long well we paid in all our lives the pension that we receive is only half what it should be electric / gas / water rates/ councill tax should be at 50% to all pensioners.
Might be better to just manufacture a PILLthat is given to us at 65/66– 60 to a woman to end it all because most old age pensioners suffer a great deal worrying about making ends meet
WE have to look after our childrens children for free because they cannot cope with paying for child minders,.
How much more do this Goverment expect of the army of old pensioners,
these so called politians look after them selves with our taxes to give a larger pension