Pension credit to increase – but how much will YOU get?

Therese Coffey outlines the benefits of Pension Credit scheme

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British State Pensions will enjoy their third-highest boost for the past 10 years in 2022. Despite the increase, there were some expectations, from the elderly community, that they may have pocketed even more. So, how much is pension credit rising by and what can pensioners expect to receive?

How much will payments increase by in 2022?

Depending on the type of pension individuals can expect to see an extra £288 coming through their doors in 2022.

This is thanks to the value of the state pension rising by 3.1 percent next year as the earnings link was removed from the triple lock calculation.

Consequently, the 3.1 percent figure is now in line with inflation.

In previous years the triple lock calculation was a guarantee from the Government that ensured the State Pension would increase year on year by the largest of three figures.

Those figures being 2.5 percent, the rate of average earnings growth or the rate of inflation.

Originally introduced in 2010 the process has been scrapped for the 2022-23 tax year due to irregularities when it comes to average earnings growth.

Regardless, the 3.1 percent growth still represents the third-largest increase to the state pension since the triple lock was introduced.

How much will pensioners now receive?

In its full entitlement, the new state pension will rise from £179.60 to £185.15 – an increase of £5.55 per week.

Comparatively, the basic state pension will go up from £137.60 to £141.85 – which will give an additional £4.25 each week.

When examined over the course of a year, pensioners receiving the full basic state pension will be given an extra £221 in 2022.

Whilst those who are entitled to the full new state pension will take home an added £288.60.

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What were the predictions for pension credit in 2022?

As more people returned to work after leaving the Government’s furlough scheme pensioners could have expected the state pension to grow by eight percent.

However, the Government prevented this from occurring.

This was because they recognised the irregular impacts that the Covid pandemic had created for the rate of average earnings growth, in 2021.

What could you put this additional income towards?

The average pensioner, according to Key Retirement, spends £210 per week on basics such as food, clothes and bills.

So, one option could be to put your added pension credit towards covering these amenities.

On the flip side, you could splash out and use your added cash to help fund a budget holiday abroad.

During the winter months, flights from the UK to southern parts of Europe can cost as little as £29 depending on where you fly from.

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