FROM April next year, the state pension will be hiked by £2.95 per week, an annual increase of £153.40 for each retiree.
The chancellor also announced that the state pension, like unemployment benefits, would not be included in a new cap on total welfare spending.
And the Treasury confirmed that the age of qualification for the state pension will continue to rise. From 2020, the age will slowly rise upward, likely to 70 for workers born after 1990.
Roger Mattingly, the president of the Society of Pension Consultants, commented: “Whilst the measures announced today might seem harsh to the next generation of retirees, they should help mitigate a disproportionate financial strain on the next generation of national insurance and taxpayers.”
A change which has attracted less focus is an alteration to voluntary national insurance contributions: from 2015, the new class of payments will allow people who reach state pension age before April 2016 to top up their state pension further.
Economist and pensions expert Ros Altmann gave her verdict: “It’s imaginative, and as long as people understand the system it could be popular with women and self employed people who have missed contributions.”
“It’s a way that people could be helped to raise their pension income without buying an annuity, which have been terrible value over the past few years,” she added.