Retirement Living

PENSIONS UPDATE 2022: GOOD NEWS & BAD NEWS

April means another round of changes to pensions – in fact, some have been in force since January. It means a mixture of things for older readers

State pensions are rising in line with inflation

Araft of changes to pensions are being brought in for 2022 – some in response to the impact of the pandemic and some that have been on the cards for a long time. Many will see income for older people drop, some will bring an increase. We’ve had a look at the basic new rules, but how they apply to each individual will depend on circumstances.

There will be increases to both the state pension and pension credit in 2022 which means more money coming in for retired people, and for younger savers new rules stop them losing cash on small pension pots worth £100 or less.

Rule change for expats

Changes are being brought in from January 2022 that affect how state pensions are calculated for Brits intending to retire abroad. British citizens who move to live in, or move between, an EU or EEA country or Switzerland will no longer be able to count time lived in Australia, Canada and New Zealand toward their state pension. This doesn’t affect those who were living in the EU, EEA or Switzerland by 31st December 2021.

State pension to increase by £290

The full new state pension will increase by £290 per year from April 2022, in line with

September’s inflation rate of 3.1 percent. The current full state pension is £179.60 a week, or around £9,339 a year. A rise of 3.1 percent adds an extra £5.56 a week, increasing it to £185.15 a week. The rise comes after the government confirmed it was axing the triple lock. This usually guarantees that the state pension will increase by the highest of three amounts: inflation, average earnings growth or 2.5 percent. But it was downgraded to a double lock to avoid a record 8 percent rise after the pandemic pushed earnings growth higher as “The 3.1 workers returned from percent furlough. rise adds £5.56 Pension credit to increase up to £279a week” Pension credit will go up in 2022 as well – and couples will be able to get up to £278.70 a week if they qualify. This is a benefit that gives you extra money to help with your living costs if you’re over the state pension age and on a low income. The most you can currently get is £177.10 a week if you are single or £270.30 for couples. From April this will go up to £182.60 and £278.70 – a rise of £5.50 a week for single people and £8.40 a week for couples.

Fees slashed for small pension pots

Flat fees on small pension pots worth £100 or less are to be axed to stop ‘rip-off’ charges wiping out savers’ funds over time. The changes would help workers who’ve built up many small workplace pensions through auto enrolment schemes during their working life. For example, this could be people who have changed jobs frequently or those who regularly take on short-term contracts of work.

The best medicine…

MAKE FRIENDS AND HAVE FUN

Oddfellows is an organisation that has been bringing people together for over 200 years. Its aim is to encourage the development of true friendships, providing members with memories to cherish, helping them to grow and creating a better society. It doesn’t exclusively recruit older or retired people, but many find more time to commit at this stage in their lives.

A national network of 113 branches supports 395,700 UK members, of Sharing adventures which 42,250 are helped by Oddfellows’ social, care and financial benefits. It has no political or religious affiliations and operates as a non-profit mutual.

If you’re interested in joining to make friends, find support, volunteer help or just enjoy the chance to travel with like-minded people, groups meet regularly in Oswestry, Wem, Knutsford and Saltney. www.oddfellows.co.uk