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State Pension is a sum of money available to individuals who have often put forward decades of National Insurance contributions. Once they reach a certain age, pensioners will be able to claim a sum every four weeks from the government dependent on these contributions. At present, the full state pension stands at £175.20 per week, but this amount usually rises each year.
The increase is attributable to the state pension Triple Lock Mechanism, which ensures the sum rises each year by the largest of the following:
- 2.5 percent
- the rate of inflation
- average earnings growth
In April 2020, the sum rose by 3.9 percent, in line with average earnings growth.
But amid speculation the mechanism could be scrapped to fund the ongoing COVID-19 crisis, the Chancellor has assuaged the fears of many older people.
Speaking to LBC today, Rishi Sunak said the government planned to keep the policy.
This was after he was asked whether pensions would be protected by the government.
He responded: “Yes, our manifesto commitments are there and that is very much the legislative position.
“We care very much about pensioners and making sure they have security and that’s indeed our policy.”
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Maintaining the Triple Lock Mechanism was one of the flagship policies of the Conservative Party manifesto during the December 2019 general election.
The news the policy is being kept, then, is likely to be widely welcomed, particularly by those already claiming the pension sum.
The comments from the Chancellor were made amid momentous changes to the state pension age today.
While the age at which people can receive their sum from the government has steadily risen, a widespread alteration took place today.
Men and women born between October 6, 1954 and April 5, 1960 will now hit state pension age on their 66th birthday.
Commenting on the change, Pete Glancy, Head of Policy at Scottish Widows said: “As people live longer, it’s clear many will also have to work for longer.
“The increase to state pension age provides a timely reminder to everyone to check your pension pots and ask yourself whether the savings you’ve built up are enough for the kind of life you want in retirement.
“Particularly in the context of COVID-19 and its impact on people’s finances, the temptation for many may be to view paying into a private pension as an expense they can do without.
“But taking a short-term view is risky and may result in sacrificing long-term financial security.”
However, today’s change is not the last uprating of the state pension age the government is currently planning.
The state pension age will rise to 67, and then again to 68 in the coming years.
At present, the receive the full amount of state pension, Britons will need 35 qualifying years of National Insurance contributions.
These are traditionally built up throughout a person’s working lifetime.
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