Many struggling to cope with huge rises in energy and food bills.
The new level of state pension payments comes into effect today and will see the full new state pension rise to £185.15 from £179.60 a week. The basic state pension full amount has risen from £137.60 to £141.85 – a rise of 3.1%, compared with a current inflation rate of 6.2%.
That’s an extra £5.55 a week for those on the full new state pension and £4.25 a week more for those on the basic rate.
interactive investor calculates that a retired person dependent on the new state pension could still be an estimated £893 short of what they need to cover the average rise in the cost of food, energy and fuel alone this year, while those on the basic state pension could be £971 short, after today’s rise.
Becky O’Connor, Head of Pensions and Savings, interactive investor, said: “If pensioners thought they were already struggling and thought things couldn’t get much worse, sadly, they probably will.
“There is no doubt that the next 12 months will be very tough for those living on their pension. Today’s increase in state pension amounts is dwarfed by inflation, which for pensioners may be even worse than the headline figures suggest, because the current inflation rate does not reflect the much higher personal inflation rate that many pensioners, who spend a high proportion of their income on energy and food, will face.
“The reality is that many pensioners may end up falling behind on bills. There is help available from the support funds run by local councils and many may be eligible for Pension Credit.
“It’s a case of having to get through the next few months. Hopefully, next year’s state pension amounts will rise more generously thanks to the reinstatement of the triple lock, which will use earnings and inflation data from this September to determine the rise in levels of state pension for 2023. But that’s a whole year away. In the meantime, focus needs to be on making sure pensioners do not suffer from cold and hunger.”
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