A proactive move by the Government has ensured State Pension increases, despite current legislation.
The Department of Work and Pensions (DWP) Secretary, Thérèse Coffey, has introduced a technical Bill in the House of Commons which gives the Government jurisdiction to increase it next year to avoid a State Pension freeze.
The Bill was introduced to the House of Commons on 23rd September to ensure that pensioners can be supported with an increase in State Pension and Pension Credit Rates for 2021/22.
Currently legislation only allows there to be increase if there has been a rise in average earnings ‘in the relevant period of the preceding year.’
But DWP have stated….“Due to the challenging economic circumstances, average earnings are expected to show no growth in that period. This Bill makes technical changes which allow ministers to deliver on their commitment to the Pensions Triple Lock next year, even if there is no growth in earnings in the relevant period, ensuring that State Pensions can still be up-rated.”
Since 2011, the Triple Lock has ensured that the State Pension is uprated by the highest of earnings growth, price inflation or 2.5%.
Thérèse Coffey comments on the Bill. She said:
“The Government has worked hard to protect all age groups during the pandemic, strengthening the welfare safety net, introducing furlough and income protection schemes, as well as supporting those who have lost their jobs back into work.
“It is only right, then, that we also ensure pensioners can see their incomes protected as we build back better.
“In these difficult times, I want to give pensioners peace of mind about their financial health.”
In the past, the same approach has been applied by previous Governments when similar challenging economic circumstances ensued.
Following the usual procedures, the Work and Pensions Secretary will carry out an assessment of social security rates soon and will report back to Parliament with an outcome of her review next month.
