Data from the ONS indicates that the State Pension will increase by £460 in April.

September 10, 2024 TruthUSA

This winter, pensioners in England and Wales are facing cuts to the winter fuel allowance, which will impact millions of people.

The new full state pension is expected to increase by £460 next April, based on the latest wages data.

Under the government’s triple-lock commitment, pensions are uprated annually using the highest of earnings growth, inflation, or 2.5 percent—whichever is highest.

According to the latest data from the Office of National Statistics (ONS), total pay growth was 4 percent for the three months to July.

This exceeds the current level of inflation, which stands at 2.2 percent. Wage growth is expected to outpace inflation, influencing the next state pension increase under the triple lock.

Based on the ONS wages figures, the full state pension could reach £11,962.60 per year from April, an increase of £460 for those who reached state pension age after April 2016.

For pensioners who reached state pension age before that, the full old basic state pension is set to rise to £176.30 per week, an increase of £353.60.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, expressed that while pensioners will welcome the increase, it comes at a time of announced cuts to the winter fuel allowance.

“With many still reeling from the news of potential cuts to their winter fuel payment, the increase may not be as significant as hoped,” she said.

Changing Rules

The rules for winter fuel payments are changing, with households no longer entitled to it starting from winter 2024/2025 unless they receive Pension Credit or certain other means-tested benefits.

In the winter of 2023/2024, 10.8 million pensioners in 7.6 million households in England and Wales received the winter fuel payment. This winter, the Department for Work and Pensions (DWP) projects that 1.5 million individuals in 1.3 million households will receive it.

Experts have cautioned that cutting the allowance will disproportionately affect the most vulnerable pensioners, with an estimated five out of six retirees living below the poverty line missing out on assistance with their winter fuel bills.

Morrissey also highlighted that the new annual pension is nearing the £12,570 personal tax allowance.

“The freeze on this threshold until 2028 raises concerns that the full state pension alone could push pensioners over it and into paying income tax in the coming years,” she stated.

Tough Decisions

Labour recently attributed the government’s decision to cut the winter fuel allowance to the “crashed” state of the economy inherited from the previous government, calling it a “tough” decision.

“Labour is making difficult decisions now to repair the foundations, so we can rebuild Britain and improve every region,” Chancellor Rachel Reeves explained in an X post.

Pensioners with lower incomes can access Pension Credit, separate from the state pension, to help cover living expenses such as housing, council tax, and heating bills. The Treasury estimates that over 800,000 eligible pensioners are not claiming this benefit.

In August, the DWP launched a “Pension Credit awareness drive” to encourage eligible households to apply for the benefit by Dec. 21, enabling more retirees to qualify for the winter fuel payment this year.

Critics of the cuts have questioned the government’s decision, with the House of Lords Secondary Legislation Scrutiny Committee expressing skepticism about the urgency of the decision and the lack of appropriate scrutiny in the policy implementation.

PA Media contributed to this report.

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