DWP confirms why it’s not raising one State | U.Ok.Finance News
A State Pension payout given to pensioners aged over 80 who retired earlier than 2016 will not be going up from April.The State Pension will increase at first of each new tax 12 months on April 6 and the quantity it goes up relies on three components, generally known as the ‘triple lock’. The new charges are decided by no matter is highest out of the patron price index (CPI) measure of inflation (measured for September the 12 months earlier than), average wage growth between May and July of the earlier 12 months, or 2.5%. For the 2025/26 tax 12 months, each the fundamental and new State Pensions shall be uprated by 4.1% – consistent with the annual increase within the average weekly earnings index for May to July 2024.The quantity additional you’ll get from April relies on while you retired, as some pensioners shall be on the fundamental State Pension, whereas others shall be on the new State Pension. But one cost that gained’t be rising from April is a little-known 25p further cost top-up that’s solely given to these aged 80 and over, who retired earlier than 2016.The 25p ‘addition at age 80’ cost for pensioners on the outdated fundamental State Pension is included within the Department for Work and Pensions (DWP) advantages checklist for April 2025 onwards, however it’s staying frozen at its present charge.Much just like the controversial £10 Christmas bonus, the 25p cost has by no means been adjusted for inflation because it was first launched in 1971. At the time, pensions have been £6 per week, so 25p represented a 4% increase.The 25p per week cost was launched in recognition of “the special claims of very elderly people who on the whole need help rather more than others”, and it’s nonetheless given to some pensioners over the age of 80 as we speak – at precisely the identical charge because it was set at in 1971.The DWP has now confirmed why it gained’t be raising the 25p age addition payout from April, for what would be the 54th 12 months in a row. A spokesman instructed The Express: “The 25p per week Age Addition, which was introduced in 1971, is paid with the basic State Pension when someone reaches the age of 80.“Successive Governments have decided not to increase the Age Addition payment since its introduction, while both the basic and new State Pension amounts have increased. Any increase would be paid as State Pension and classed as taxable income. That could also have an impact on the amount of State support people receive through other benefits.“The Age Addition is not part of the new State Pension but for those people who reached State Pension age before 6 April 2016 it will continue under the existing rules.”The full new State Pension, which is out there to those that reached State Pension age after 2016, does not embody the 25p age addition, however those that already retired earlier than the pension changeover are nonetheless eligible to obtain their quarter of a pound.A Research Briefing issued by Parliament in 2013 explains: “The addition has never been increased. It was specifically excluded from the statutory index linking provisions of the Social Security Act 1975 (now replaced by section 150 of the Social Security Contributions and Benefits Act 1992). The Labour Government did float the idea of raising the age addition in their discussion document, ‘A Happier Old Age’ in 1978.“In May 2012 there were some 3.2 million pensioners aged 80 and over. This would put the annual cost of the 25 pence age addition at some £41 million. If the 25 pence age addition had been increased by the Retail Prices Index (RPI) since its introduction in 1971, it would now be around £3.20 per week. The annual additional cost of increasing it to that amount would be around £500 million.“Governments of both parties have generally resisted suggestions that the age addition should be increased, either arguing that greater priority should be given to maintaining or increasing the basic rate of benefit, or choosing to target additional resources on older pensioners by other means, for example, through means-tested benefits or lump sum payments, such as the Winter Fuel Payment.”
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