State Pensions to Increase 2.5%

Basic state pensions will rise by 2.5% next April, which in real terms is an extra £2.40 per week, per pensioner. This is in spite of negative inflation figures last month.

The Office for National Statistics announced this week that the Retail Prices Index had fallen 1.4% in September. Normally UK pensions are adjusted in line with the RPI rates from the previous September, although the government has a policy of a minimum increase of 2.5% if the RPI is lower.

Most other benefits that are linked to the RPI will not be affected, such as disability living allowance, maternity pay and carers’ allowance.

Several other benefits are linked to the Rossi index, which is the RPI with housing costs removed. This is currently at a positive 1.8%, which will lead to increases in job seeker’s allowance and incapacity benefit.

For a single pensioner the weekly pension will rise to £97.65 from £95.25. A couple will receive £156.15, up from £152.30.