The State Pension Revaluation for Transitional Pensions Order 2024
Summary
The State Pension Revaluation for Transitional Pensions Order 2024 is a piece of legislation that has been approved by the UK Parliament. The order will come into effect on 6 April 2024 and will change the way that state pensions are revalued for certain people.
Background
The state pension is a regular payment that the government makes to people who have reached retirement age and who have paid enough National Insurance contributions. The amount of state pension that someone receives is based on their National Insurance record and the age at which they claim their pension.
Until now, state pensions have been revalued each year in line with the Consumer Prices Index (CPI). However, the government has decided to change the way that state pensions are revalued for people who are claiming a transitional pension.
What is a transitional pension?
A transitional pension is a type of state pension that was introduced in 2016. Transitional pensions are intended for people who were born between 6 April 1951 and 5 April 1960 and who have a certain number of years of National Insurance contributions.
How will the change affect transitional pensions?
The State Pension Revaluation for Transitional Pensions Order 2024 will change the way that transitional pensions are revalued from 6 April 2024. Transitional pensions will be revalued in line with the “triple lock”.
What is the “triple lock”?
The triple lock is a mechanism for increasing state pensions each year. The triple lock guarantees that state pensions will increase by the highest of the following:
- The rate of inflation (CPI)
- 2.5%
- The average increase in earnings
Impact of the change
The change to the way that transitional pensions are revalued is likely to have a significant impact on the amount of state pension that people receive. The exact impact will vary depending on individual circumstances, but it is likely that transitional pensions will increase by a higher amount than they would have done under the previous system.
Other changes
The State Pension Revaluation for Transitional Pensions Order 2024 also includes other changes, such as:
- A new method for calculating the earnings of self-employed people for the purposes of the triple lock.
- A new method for calculating the amount of state pension that people can receive if they have deferred their claim.
Conclusion
The State Pension Revaluation for Transitional Pensions Order 2024 is a significant piece of legislation that will change the way that transitional pensions are revalued. The change is likely to have a positive impact on the amount of state pension that people receive. However, it is important to note that the exact impact will vary depending on individual circumstances.
The State Pension Revaluation for Transitional Pensions Order 2024
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