State pensions are expected to rise in line with earnings growth, but winter fuel cuts and inflation are expected to wipe out any benefit
Economists believe the state pension will be linked to average earnings growth, the figures of which are due out on Tuesday The potential rise, which equates to more than £400 a year for those who reached pension age after April 2016, comes as all but the poorest retirees will lose their
Sir Steve Webb, former pensions minister and now partner at LCP, said the predicted rise in the state pension doesn’t represent a real increase in living standards. “It is also worth remembering that the majority of pensioners now pay income tax, and so typically 20 per cent of any increase will be clawed back in taxation.
The rise means hundreds of thousands more pensioners will be dragged into paying more income tax on their pensions, as they go over the £12,570 personal allowance tax threshold.
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