The government has confirmed that the state pension will rise by 2.5% from
April 2022, breaking the pension lock as a result of the impact of the
pandemic
In a busy day in parliament, the minister of state told MPs that this would
be a one-year intervention and that the normal increase in line with average
earnings increase would be reinstated from the 2023-24 tax year.
As happened last year, once again the state pension will rise at a fixed
rate below the RPI rate of inflation.
Secretary of state for work and pensions, Thérèse Coffey MP, said: '[Last
year], we legislated to set aside the earnings link, allowing me to award an
uprating of 2.5% as this was higher than inflation. If we had not done this,
state pension would have been frozen.
'Thanks to our vaccination programme which started with the eldest and most
vulnerable in our society, we have seen that as the economy and businesses
have reopened and millions have moved off furlough and returned to work, the
labour market has shown strong signs of recovery and earnings have risen at
an unprecedented rate and we face a distorted reflection of earnings growth.
'So tomorrow, I will introduce the Social Security (Up-rating of Benefits)
Bill. For 2022/23 only, it will ensure the basic and new state pensions
increase by 2.5% or in line with inflation, which is expected to be the
higher figure this year. And as happened last year, it will again set aside
the earnings element for 2022/23, before being restored for the remainder of
this parliament.'
In addition to those receiving basic and new state pensions, this will apply
to those receiving standard minimum guarantee in pension credit and widows'
and widowers' benefits in industrial death benefit.
Coffey added: 'Since 2010, the full yearly basic state pension has increased
by over £2,050 in cash terms. There are also 200,000 fewer pensioners in
absolute poverty - both before and after housing costs - than in 2009/10.'