UK STATE PENSION RISE 2022 & What Has Happened to CPI & RPI?
The official increase in the UK State Pension from April 2022 will be 3.1%. This is due to the increase being aligned to the suspended triple lock meaning that average earnings will not be included in the test. Therefore the remaining two parts to this is the greater of CPI or 2.5% guaranteed minimum.
CPI came in at 3.1% in September largely due to increasing transport costs and dragged down slightly by the cost of restaurants and hotels. And interestingly RPI, for those whose pensions are still based off of that measure came in at an eye watering 4.9%. As a reminder RPI includes mortgage interest payments and is therefore heavily influenced by house prices and interest rates. CPI on the other hand takes into account all other goods and services but not housing costs.
Therefore CPI being the higher amount the full New State Pension, so remember based on 35 qualifying years will increase from £9339 per year to £9,627 per year, which works out on a weekly basis to be £185.15 per week.
Those on the old basic state pension, those that reached state pension age before April 2016 will see their weekly payments go from £137.60 to £141.85.
The suspension of the triple lock is temporary to address the volatility in the average earnings figure that was largely due to the recovery in earnings post the lockdowns. Had the triple lock not be suspended then the increase to the state pension would have been a whopping 8.3%.
The following table shows how the triple lock has been applied since 2012 with a fairly even split between the various measures put into place and showing how low inflation has been running with the guaranteed minimum being relied on at least 4 times.
The CPI figure not just being relevant to the state pension but also for those with public sector final salary pension schemes the september CPI figure is used to determine how much the NHS, teachers and civil service schemes will rise by next year for those in receipt of pension payments or deferred members. Also to determine increases in universal credit, attendance allowance, income support etc.
And not to forget that RPI, at 4.9% is still the figure used for some final salary pension schemes and also for tobacco and alcohol duty, train tickets, mobile phone tariffs, car tax and some index linked bonds.
If you were a little cynical it does look a little like the government links its spending to CPI and some of its taxes or income generators to RPI. And I think we can all guess which tends to the higher and which tends to be the lower. Otherwise known as ‘inflation shopping’. And probably for another video but the government is likely to move to CPIH at some point in the future.
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All is a big shame because everything is upsetted now from work to planning. At the moment I see my partner can barely live on his pension, so I save as much as I can but I am loosing my job now, so how will I get to pension age, it's 12 years to get there for me!?? if I start using my saving, then nothing will be left for pension time!??! I worked hard so far even with 2-3 jobs and made savings but none of these jobs do me for daily life now. If we have some saving my partner says, we are not entitled to benefits?!?!?! I want to give up, give in altogether because I am toooo tired now to try to do my best and see no hope. In this country one needs to be super wealthy or super poor, but in between I have exhausted all my hopes, let my health to the work and yet won't be recognised by the government when I loose the job with 12 years to go which seems impossible with all 0 hour contact out there!?!? They make you believe on jobs but this is just tons of email for nothing. In my field my job has gone to Philippines, so this is not just my job, it's all efforts that have gone as well. Transferable skills is a joke coz we can't compete with Asian salaries with the bills we have to pay here!?!!1
The people who don't get any increase living abroad although contributed all their lives, are going to be able to vote in the next election. A little known fact that will hit the government by some 520,000 eligible votes, thats folks giving a big thank you for shafting them by voting NOT conservative.
Useful information thank you
Useful information thank you so much
I hope u know that our illegal immigrants are housed in £250per week( night) hotels and there are 20,000 of them so far this year, but can’t pay people who have paid into the system for 50 years
It was blindingly obvious state pensions would not go up by 8% as it was an artificial "big dipper" in earnings caused by covid, and there's no downside on the measurement. We have average pensions but we pay very little in, and are often not renting property in retirement. To get a UK state pension you'd need £230k in a private scheme which hugely exceeds what most people ever pay in. If I earn £60k for 35 years and you earn £20k for 35 years you get the same pension as me, and what you're likely to get has been a known quantity for years.
I wonder why it is that the MPs pay rises don't follow the same rules as those used to decide on pensioner's pay rises???
and johnson thinks 250.000 a year is chicken feed
Boris and his rich mates showing, yet again, that their manifesto wasn't worth the paper it was written on. They must have used Andrex so that it could be easily flushed away.
I hope the people remember this vote, 300 Tories where whipped to vote for impoverishing the old on the say so of Millionaires Johnson and Sunak, they make you sick !
Parliament robbing the old because they want to waste money on other things like giving themselves a big pay rise again. They always rob from the pot to give themselves more
The tories are taxing pensioners far more than ever, a lower than expected rise next year , an increase in local rates, free tv license abolished the list goes on add fuel rises food prices and the general cost of other living expenses, how do these fat Tory millionaires expect normal folk to live, so much for leveling up,
I reached 65 in 2017 , when my pension was 155 per week . But living in Thailand since 2015 , it has been frozen at that figure . I paid my N I C and taxes since leaving school in 1968 and this is how many of of us are treated . Trebles all round …NOT.
Just remember when it is time to vote
temp measure ?they said that about the rise in vat to 20%
Bunch of Liars, wouldnt vote for them under any circumstances
All pensioners will remember this at the next election but who else can we put in labour,liberals what a joke .
Petrol is up 40%. Tobacco is up 20%. Electric and gas are up so much people will soon have to refuse to pay. The whole thing is a scam. The game is rigged.
Will all British state pensioners get this increase?
When have we ever had 8 point anything increas
The Conservatives have forgotten those that voted for them. They have plenty of money for virtue signalling BS? Saving the planet while screwing old folks?
It is called a default. You will not get paid what you are owed.
If your income is over 12,570 then you are only going to receive 80% of the 3.1% increase, so in reality a 2.48% increase, well below inflation. The Chancellor has frozen the personnel tax free allowance for the next 5 years at £10,570, so any increase related to inflation will lose 20% automatically for the next 5 years. My state pension is currently £140.75 per week, based on a 38 hour week, that is only £3.70 per hour against a national minimum wage per hour of £9.50. I was lucky, I have other pensions and savings, but pity anyone trying to manage on this meagre amount.
Shameful and disgusting. My poor friend has waited months just to be paid her pension. The Tories don't care!
IT IS NOT SUSPENDED YET…..
Thank you Edmund.
I am using your information to learn and advise my accountancy clients.
Most of my clients are not wealthy and have to consider them being on state benefits and how an annuity would effect that; i.e. often better to cash the pension in and clear any loans etc.
Disgrace,pension should be at least the weekly minimum wage amount.
So, for a mere £3-5 billion the government could have fairly funded the miserly state pension. Another Conservative promise broken (like tax increases), and a particular insult to the generation that has suffered most from the covid fiasco.
Remember how much was wasted on the "world-beating" track and trace fiasco ?
Boris clearly underestimates how 12.5 million of us, from the 'Quodrophenia' generation, will be critical to his survival when it comes to an election.
Great informative vid, cheers.
OAPs are being robbed blind. Isn't it funny how the minimum wage was hiked 6.5%, and even more for under 18s. And yet someone on minimum wage typically gets about 2.5 times as much as the state pension that so many are expected to survive on. Add to that the fact that heating bills are set to go through the roof, and food bills are also shooting up, and it's clear that in true Tory fashion the OAPs have been well and truly screwed.
One wonders what the Government's Pay Review body will recommend?