Retirement

State Pension Increase Confirmed

The basic state pension is increasing by 2.5% a week in April 2015 in line with the government’s triple lock guarantee.

The rise amounts to £2.85 and means a single pensioner will pick up £115.95 a week.

The triple lock is measured against adjusting the state pension by the highest of the annual inflation rate in September 2014, average earnings or 2.5%.

Nearly a million of Britain’s poorest single pensioners will qualify for pension credit top-ups taking their weekly cash up to £151.20 a week, while couples will be paid £230.85.

Flat rate awaited

This increase marks the last time the government will calculate the state pension this way for new pensioners.

The new flat-rate state pension starts in April 2016 for new pensioners, while pensioners already receiving the state pension will stay under the same rules.

Pensions minister Steve Webb is yet to reveal the payment rate, but has yet to reveal the exact amount although he has indicated the minimum payment will be £151.25.

For expats receiving the state pension abroad, only countries with reciprocal pension agreements with the UK will qualify for the index-linked increase.

Click here for a list of the countries where the state pension is index-linked

Expat tax changes

Other expat tax changes following the mini-Budget include:

  • Scrapping plans to axe the personal income tax allowance for non-residents. The government has ditched these plans following a consultation. Expats will keep their £10,000 allowance for the current tax year. The limit will rise to £10,600 from April 2015

The allowance allows expats to offset pension payments or rental profits before they start to pay tax.

A 90 day rule in line with the statutory residence test will be introduced for expats wanting to claim private residence relief and letting relief if they have moved overseas and rented out their former main home in Britain.

  • Expats with children aged under 12 will save airport taxes on trips out of Britain from April – and in 2016 the threshold will apply to children aged 16 years old or less

“We are awaiting the capital gains tax legislation with interest, but are glad to see the Chancellor did a U-turn and reversed his proposals to take the personal tax allowance away from expats,” said Jon Preshaw, chairman of the Chartered Institute of Taxation’s management of taxes subcommittee.

3 thoughts on “State Pension Increase Confirmed”

  1. “For expats receiving the state pension abroad, only countries with reciprocal pension agreements with the UK will qualify for the index-linked increase.” Wrong no agreements are needed, the DWP have admitted they are not necessary in answer to a freedom of information request at least a year ago. I do wish writers of these articles would check on the facts. The fact that the minority of ex-pats are frozen is just plain old discrimination by the UK government. There is no logical explanation for this continued injustice and promoting the DWP’s old excuse does not help to garner support for ending this outrage. ALL expats should either be frozen or ALL unfrozen ALL should have the same rights to an index linked state pension because ALL have paid for their pension under the same terms.

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  2. You are right protempore but Lisa Smith probably got her Information from the DWP

    link given in the text and they continue to spew out lies and deceit in order to deny the obvious discrimination that Steve Webb knows all about since he challenged this policy when in opposition. But remember we are dealing with politicians and you can bet that the promise will be tripping off their tongues only to be dumped when elected. And they wonder why the electorate are so disillusioned by their false statements and new parties are gaining ground.

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  3. protmpore and morgeo you are correct that a reciprocal agreement is totally unnecessary to enable the UK government to uprate pensions world wide. Oddly though the DWP are also correct in saying that only countries with such unnecessary agreements with the UK will qualify for the index linked increase. The problem is in the wording that the DWP use and which INFERS that without such agreements it would not be possible to implement index linking; it is not exactly a lie…just a very deceitful red herring.

    Something the article does not make clear is that while the increase in pensions from April 2015 is 2.5%, the rise is GBP2.85 only for those already on the full pension and those with lower pensions because of a diffcient NI contribution record will only qualify for a 2.5% pro rata increase.

    I believe that pension credits will not be eligible for uprating and some will find the increase amounts to less than 90 pence a week.

    Of course, as both protempore and morgeo have pointed out, the frozen pensioner this year will benefit, as they did last year and the the years before with an increase of 0%. No increase on the amount of their pensionfrom when it first became payable in the host country. An irrational, illogical, dıiscriminatory anomaly, as Steve Webb has variously described it, which he now condones in Clause 20 of the Pensions Act 2014.
    .
    Sorry the “triple lock guarantee” is neither a guarantee to ALL those who have contributed on the same terms and conditions; it ıs not a triple but quadruple lock based either on the average rise in earnings, or prices or 2.5%….or for 1 ın 25 pensioners damn all.

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