Pension pot: OAPs to receive rise worth more than £350 a year

Those who reached state pension age after April 6, 2016 and are entitled to the full New State Pension will see their weekly payments rise from £168.60 to £175.20. Those who reached state pension age before then and are receiving the full Basic State Pension will get £134.25, up from £129.20. Some will also be receiving a state earnings-related pension. Under current “triple lock” rules, the state pension has been rising at the highest of earnings inflation, price inflation or 2.5 percent a year. 

This year it will be uprated against earnings growth of 3.9 percent, the highest of these benchmarks, and more than double the rise in inflation-linked benefits and tax credits. 

Steven Cameron, of retirement specialist Aegon, said: “With many people including pensioners facing financial difficulties to cover basic expenses, any extra, however little, helps. 

“This inflation-busting increase offers state pensioners some much-needed good news.” 

Tom Selby, from investment firm AJ Bell, said: “This is particularly welcome as dividends, which provide a vital source of income for retirees with private pensions invested in the stock market, have all but dried up as a result of the Covid-19 pandemic.” 

But the increase is bound to ignite controversy over the cost of the triple lock policy. 

Without the triple lock, the cost of the state pension is projected to rise by £21billion between 2020-21 and 2060-61. 

With it, the rise is predicted to be £35billion for the same period. 

At the moment, ministers have committed to continue the policy only until 2022. There were also warnings yesterday that the pension rise may make older people more of a target for scammers. 

Anyone approached by a would-be investment company should check it is authorised and be sceptical about deals sounding too good to be true. The Pensions Regulator, Financial Conduct Authority and Money and Pensions Service are urging savers to take their time and visit the Pensions Advisory Service website for free guidance before making decisions. 

They can also visit the ScamSmart site to learn how to protect themselves from fraudsters.

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