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Government casts doubt on index linked pension increase
05/12/2011
After the large rise in September, by 0.7% to 5.2%, in the Consumer Price Index it was confirmed by the Government that the actual decision on pension increases will not be made until the last couple of months of the year.
September’s inflation rate is used to determine the annual increase to benefits and pensions, meaning the State pension, now £102.15 a week for those entitled to the full amount, is expected to rise to £107.47 a week, following the next budget in April 2012.
The increase to state handouts is also on hold until later this year, which could result in a smaller increase to benefits than state pensions. However, this situation is unlikely, as it would hit the most vulnerable, such as the disabled.
The Government has recently reconfirmed its policy that increases in benefits are in line with the CPI rather than the RPI. RPI is usually higher than the CPI, as it takes into account mortgage interest payments and council tax.
Homeowners aged over 55 years who are concerned about their level of pension and would like to know how much money the value of their property could release to increase their income, can find out by contacting therightequityrelease.co.uk for equity release advice.
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