State pension to rise by 34p per day from April 2010
The basic state pension is to increase from April 2010 by 2.5%, which equates to a rise of £2.40 per week, or 34p per day.
For a single pensioner, the weekly pension will rise from £95.25 to £97.65, while a pensioner couple will see a rise to £156.16 from the current £152.30.
State and public sector pensions are both calculated with reference to September inflation numbers and the rise comes despite the Retail Prices Index (RPI) being negative last month.
The Office for National Statistics (ONS) revealed today that RPI in September was -1.4%.
Meanwhile some other state benefits are linked in a similar method to another measure of inflation (the Rossi index) which is the RPI excluding housing costs.
This is currently negative so housing benefit, council tax benefit, incapacity benefit, job seekers’ allowance (JSA) and income support will all remain at the same rate from next April.
Tom McPhail of Hargreaves Lansdown described the state pension rise as a “disappointment“ and said “for many people who find that their own personal rate of inflation is far higher than the national average – their income is simply not matching their escalating livings costs.”
Earlier this week the Pensions Advisory Service revealed that only a third of women currently receive the full state pension.
Many women miss out on a full state pension if they stop working or opt to work part-time to bring up their children.
As a result, they are missing out on National Insurance contributions due to leaving the workforce or working in low paid part-time jobs.
However, from 2010, the Government says new reforms will make pensions fairer and more generous for women.
Entitlement to the full state pension is based on the number of National Insurance contribution credits made by workers or those on certain state benefits. This is currently 44 years for men and 39 years for women.
However, men and women who reach state pension age on or after 6 April 2010 will only need 30 qualifying years to get a full state pension.