State pension: DWP announces changes to affect thousands from next year

Sunak’s triple lock pension promise slammed by Portillo

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State pension changes will be enacted, with an impact on anyone who moves to or lives in the European Union (EU), European Economic Area (EEA) or Switzerland.

The changes could also affect those who have previously lived in Canada, New Zealand or Australia – if before March 1, 2001.

It will mean that from January 1, 2022, periods spent living in Australia (only before March 1, 2001), Canada or New Zealand will no longer qualify for state pension increases.

The DWP said: “Your UK state pension will be calculated, or recalculated if already in payment, using only your UK national Insurance record”.

DWP Pension changes

State pension rules will change for thousands of people, the DWP has announced (Image: Getty)

The DWP states you won’t be affected by the change if you either:

– Live in the UK – whatever your nationality is

– Are a UK national, EU or EEA citizen or Swiss national who was living it the EU, EEA or Switzerland by December 31, 2021

Therefore, people who are living in an EU or EEA country or Switzerland by December 31, 2021 will see their pension increase at the same rate as if they lived in the UK, according to the triple lock.

This means that for this time the state pension will essentially be ‘frozen’ and will decrease in value in real terms due to inflation.


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The changes have been implemented because the UK is no longer in the EU.

In the UK, state pension pay-outs rise each year according to the triple lock. This has been Government policy since 2011.

It means state pensions are guaranteed to rise in line with the highest of inflation, wage growth or 2.5 percent.

However, for people who are affected as outlined above, their state pensions will not receive the triple lock boost for the period in question.

The triple lock has been mired in controversy recently as artificial wage growth caused by the pandemic threatens to make increases even costlier than normal.

The wage growth has been affected as people have tapered away from furlough support in recent months, meaning they are no longer receiving only 80 percent of their full wages.

The new, full state pension is currently £179.60 per week which equates to £9,339.20 a year.

Wage growth of eight percent, as has been widely forecast, would push the new, full state pension over £10,000 a year.

The Office for Budget Responsibility (OBR) has even forecast that wage growth could reach 10 percent, precipitating an even greater state pension increase.

The “old” basic state pension is paid at £137.60 per week, which works out at £7,155.20 a year.

An eight percent increase on this would take it to £7,727.62 a year.

William Murphy

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