There is little of cheer for those poorer pensioners out there. However, it is likely that the pre-Budget report will bring some good news with changes to the basic state pension and possibly also to pension credit, which is used to top up the incomes of the poorest pensioners.
Each year the Retail Prices Index (RPI) figure for September is used by the government to calculate the next year’s increases in the state pension and other benefits. In September, we saw inflation peak at 5.2 per cent. Therefore this will mean that from next April single pensioners will see their weekly pension payments rise by a larger than usual amount, £4.54 to £95.24, while pensioner couples will see a rise of £7.26 to £152.30.
There are charities campaigning for a greater increase for older people to reflect the real increase in living costs faced by many retirees. The Chancellor is unlikely to comply with these demands, given that the increases are so much higher than last September’s 3.9 per cent.
It is inconceivable that the Chancellor will ditch winter fuel payments, given the ever increasing cost of energy. You never know, he might even increase them.
There is also school of thought that Mr. Darling might remove the statutory obligation for retirees to buy a pension annuity at age 75 as the value of many retirement funds have been hit so hard by the turmoil in the financial markets in the past year.
I guess we’ll just have to wait to find out.
