State Pension is provided by the government for Britons who have worked for decades within the UK, and is a sum to help them during retirement. The full State Pension amount increases every year under the Triple Lock Guarantee. This means it rises depending on which is the greatest of 2.5 percent, the percentage growth in prices in the UK, or the average increase in wages.
This year, the State Pension rose by 3.9 percent, in line with average earnings.
When recently asked about his Triple Lock manifesto commitments, Prime Minister Boris Johnson stated he would “meet all of our manifesto commitments, unless I specifically tell you otherwise.”
He added: “It’s an important point, and we won’t be blown off. Of course, we are on track to delivering these things.”
This statement provided buoyancy and reassurance to pensioners looking to secure a comfortable retirement.
However, it is important to note a certain group may not be entitled to the Triple Lock commitment.
Those who have chosen to retire abroad in specific countries have faced the prospect of their State Pension entitlement being frozen at the rate it was when they left the UK.
While it is possible to claim the new State Pension overseas in most countries, the annual increase is only available to pensioners living in certain places.
Those who live abroad only receive a rise if they live in the European Economic Area (EEA), Gibraltar, Switzerland, and certain countries which have a social security agreement with the UK.
These people are set to see their pension increase in line with Triple Lock, thanks to the UK government’s withdrawal agreement which has negotiated reciprocal rights for State Pension increases.
This is after concern rose that British retirees living in EU or EEA countries could lose out on pension rises in the event of a no-deal Brexit.
However, it is important to note those moving abroad to these countries after 2020 could see their pension payments frozen.
This is because these rises are conditional to a withdrawal agreement and whether arrangements with the EU are in place on January 31, 2020.
Those who move to countries which do not have an agreement with the UK will be affected by the freeze unless they return to the country.
Recently, there have been calls to scrap the Triple Lock system in the UK to cover the increasing cost of the COVID-19 crisis.
A document viewed by the Telegraph suggested the Treasury could look to scrap the protection.
Treasury officials appear to have advised the Chancellor Rishi Sunak that it is “better to break the tax lock to achieve revenue of this scale than attempt to raise this level of revenue with this constraint”.
The officials argued stopping the cost of the pension triple lock could produce savings of circa £8billion per annum “when compared to the base case”.
Pensioners who retired before April 6, 2016, are entitled to the ‘old’ State Pension system which could see them receive up to £134.25 per week.
Those who retired after this date will fall under the New State Pension system, and could gain a maximum of £175.25.
Published at Sat, 30 May 2020 10:43:00 +0000