Latest Average Earnings Mean £460 State Pension Increase

Figures released today by the Office for National Statistics (ONS) with UK average earnings inflation for May to July at 4%pa meaning the UK State Pension should increase by £460 in April 2025.

Remember, the ‘triple lock’ on state pensions means increases of the higher of CPI inflation, Wages Inflation or 2.5%pa.  Wages inflation is higher that CPI or 2.5%.

This means 10 million people will benefit from an above inflation state pension increase, that’s a cost of an extra £4.6bn a year and continuing every year.

Comment

The Labour party suggested a £22bn ‘blackhole’ in public finances left by the Consrevatives but seem to be ignoring the fact that public sector payrises they have agreed to, inlcuding the NHS will cost £10 billion and the next round of triple lock state pension increases will cost another £4.6bn.

Add, CPI inflation increases to other state benefits, it is easy to work out this is new debt and not an existing whole.  Interesting though, the above £460 increase applies to those on the NEW State Pension, those that hist state pension before 6^th April 2016 are still on the older ‘basic state pension’ or old age pension and also have a 2^nd Additional Pension from SERPS or State 2^nd Pension contributions.  Basic state pension will also get the 4% wages inflation increase but State 2^nd Additional Pension will increase at CPI rather than the triple lock.

The problem, as we have highlighted on this site, is that we do not pay income taxes anywhere near what we used to in the 1970s (30% basic rate tax) and today, 20% basic rate tax.  Furthermore, when the Tories increased national insurance contrubutions for all by 1% in summer 2022, it was then abolished in Winter 2022 after a media and public outcry. 

We cannot expect a functioning NHS, Prison Service or Emergency Services if we are not all prepared to suffer or contribute.  All politicians continually ‘duck the issue’ that we need to pay more taxes and NIC, benefit increases should be curtailed for those 9m economically inactive people that do not pay NIC.  They should be forced to back to work and pay NIC or contribute to society in other ways (e.g. community service) if they are physically or mentally able to to get state pension credits as well as those living off investment and rental income, also to start paying NIC as they as well as most of the 9m economically inactive work age people still use the NHS and emergency services.