Your state pension is supposed to increase yearly to keep pace with the UK economy. Please read on if you’d like to learn more about the pensions increase for 2022 – 2023 and whether it applies to your pension scheme.
Pension Increase 2022: Summary Table
|📈 The 2022 – 2023 State pension increased by?||3.1%|
|🤔️ What is the 2022 basic State Pension?||£141.85 per week|
|🤩 What is the 2022 full rate State Pension?||£185.15 per week|
|❓ The new 2022 State pension took effect on?||11, April 2022|
The state pension rise 2022 came into force on the 11th of April 2022. The Secretary of State for Work and Pensions increased by 3.1% from the previous year. The figure was arrived at by relating to the CPI (Consumer Price Index) across the relevant reference period, which was the year to September 2021.
The pension rise 2022 of 3.1% in April 2022 saw the basic state pension increase to £141.85 per week, while the full pension rose to £185.85 per week. To qualify for the basic pension, you usually need to have made 10 years’ worth of National Insurance Contributions, and for the full pension – 35 years.
The Scottish Public Pensions Agency also applied an SPPA pension increase in 2022 with the same increase in state pension 2022 as in England.
The state pension increase and the retirement age or state pension age are now the same for every UK resident who contributed funds against their national insurance number.
Occupational pensions are also influenced by the cost of living or CPI index, but some pension schemes offer supplemental increases.
The Local Government Public Service Pension Increase
The local government pension increase in 2022 follows the same pattern as the state pension rise detailed above with the LGPS pension increase in 2022. The same applies to the civil service pension increase in 2022.
The Police Pension Scheme
In some instances, the police pension 2022 increase is slightly more than the state UK pension increase in 2022. The current scheme – PPS 15 (Police Pension Scheme 2015) – follows the 2002 UK state pension rise, but active members get an additional 1.25% on top of the 3.1% CPI pension increase in 2022.
The NHS Pension Scheme
The NHS pension scheme is run by the NHS BSA (National Health Service Business Service Authority). The 2022 NHS pension increase followed a similar pattern to the police pension increase in as much as it mirrored the 2022 UK state pension rise, the consumer price index CPI increase of 3.1%, but plus an additional 1.5%.
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The BT Pension Scheme
BT pension scheme members are categorised into three groups – A, B, and C. The different groupings relate to the salary basis on which their pensions are calculated. The BT pension increase in 2022 for Groups A and B was 3.1% – the same as the state pension increase in April 2022. For Group C members, however, the 2022 increase was 5%.
What does the tax year 2023/2024 hold in store?
According to ‘The Telegraph’, the removal of the triple lock pensions in 2022 was not welcomed by pensioners. But when it was removed, the government stated it would only be for one year. Pensioners are now hoping that the government will stick to its promise and that the triple lock pension scheme mechanism will be reinstated next year, meaning that pensions could see something like a 10% increase in their state pension income from April 2023.
Review your pension scheme options
With the cost of living continuing to spiral, the state pension alone is probably insufficient to grant you the retirement lifestyle to which you likely aspire. A workplace pension will help, but even the two combined may not be enough. Regardless of whatever retirement age you plan, sound advice on how to invest money can help you realise your goal.
Understanding your pension options is key, especially if you need to put a self-employed pension in place. Pension transfer could be an option whereby you can consolidate several small workplace pensions and put them into a new private pension or even a stocks and shares ISA.
The earlier you start thinking about your retirement, the better. But it’s never too late to start. The right 50s retirement savings plans could make all the difference to your eventual standard of living in retirement.
What countries do the increase in UK State Pension apply to?
The 2022 – 2023 State Pension increase applies to Scotland, Wales and England.
Will the UK state pension increase affect me if I live abroad?
You should get an increase in your UK State Pension if you live in European Economic Area (EEA), Gibraltar, Switzerland and certain countries that have a social security agreement with the UK such as the USA, the Isle of Man, and the Philippines.
Even though countries like Canada and New Zealand have social security agreements with the UK, these countries are excluded from the UK State Pension increase. So, you will not get a yearly State Pension increase if you live in these countries.
How does Brexit affect the UK pension increase?
If you are living in the European Union, your UK State Pension will increase if you are covered under the withdrawal agreement. The agreement covers a UK national living in the European Union as of 31st of December 2020 and is either a worker, self-employed, ‘frontier worker’, self-sufficient person or student with comprehensive sickness insurance and enough money to live on, and has the right to permanent residency. Family members are also covered.