“£1,250 more a year for pensioners. That’s a record we can be proud of.”
Theresa May , 19 April 2017
The government has increased the cash given to pensioners eligible for the full basic state pension. But once inflation is taken into account, the increase is less than half of what the Prime Minister suggests, and is only for pensioners receiving the full amount of the basic state pension.
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How much will pensioners be getting once we take account of inflation?
The Department for Work and Pensions told us that the Prime Minister was referring to changes in the amount paid to pensioners who receive the full basic state pension.
The basic state pension is a payment from the government that you receive if you reached state pension age before 6 April 2016 and you paid National Insurance contributions during your working life. In 2017/18, the basic state pension is £122.30 per week.
In 2010/11 pensioners eligible for the full basic state pension were paid £97.65 per week. This is £24.65 less per week than in 2017/18. Per year, this is £1,281.80 more in cash.
But what about inflation? Simply put, things cost more in 2017 than they did in 2010. What does this mean for changes in the state pension?
If that £97.65 state pension in 2010/11 had just risen in line with inflation, it would only be worth £111.55 now. So it’s actually £10.75 more per week, or £558.62 a year, from the government once we account for inflation.
Not all pensioners are eligible for the full basic state pension
To get the highest possible amount from the basic state pension you must have paid National Insurance or received National Insurance Credits for 30 years. This means that not all pensioners eligible for the basic state pension will get the increase mentioned by the Prime Minister.
The changes the Prime Minister was referring to don’t cover the new state pension. If you reach state pension age on or after 6 April 2016 you’ll receive this form of pension instead, for which the highest possible payment is £159.55 per week.
This amount is higher because the new state pension isn’t topped up with the additional State Pension like the old one is. Instead you receive one payment based solely on your National Insurance contributions.