Poorest retirees to see smallest pension rise

Today's pension and benefit rates release shows that the rate of the state pension for new pensioners will rise by £4,80 from £159.55 to £164.35, an increase of 3%.

However the rate of pension credit, the benefit for the poorest pensioners, will rise from £159.35 to £163, an increase of just 2.3%.

This is because the state pension is protected by the triple lock whilst the legal requirement on pension credit is only to increase in line with the growth in average earnings.

Royal London says that while in previous years governments have found extra money within the benefits system to make sure the poorest pensioners got the same rise as their better off counterparts, this year this has not been done.

Royal London Director of Policy, Steve Webb, said: "It is surprising that the government has decided to give the poorest pensioners the smallest increase. For those on pension credit, the rise is below the rate of inflation which will create a squeeze on the living standards of the poorest pensioners. By contrast, better off pensioners will get a full inflation-linked increase. For many years pensioner poverty has been falling and it would be worrying if that progress were to be reversed because of decisions like this."