Economic forecasts predict Uk state pensions could rise by almost 8% next April

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Economic forecasts predict Uk state pensions could rise by almost 8% next April
Economic forecasts predict Uk state pensions could rise by almost 8% next April

Economic forecasts predict Uk state pensions could rise by almost 8% next April.

British expats in Spain are rejoicing at the news that state pension could rise by 8% in April 2022, the forecast is based on early economic indicators.

This increase – significantly higher than the 2.5% amount applied in April this year – would be due to the state pension rise being linked to the UK’s earnings growth. Wages have soared in the past few months as more people come off furlough and return to work.

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Any rises to the state pension each year are set by the triple lock, which is a government policy that ensures the state pension will rise by either 2.5%, the rate of inflation or average wage growth (whichever is highest).

The Bank of England expects inflation to peak at 3% or more later this year, before falling closer to 2% next year.

That means earnings growth will almost certainly be the highest of the three this year, as the coronavirus has skewed wages since the onset of the pandemic more than 16 months ago. Millions of workers have been on a reduced wage through furlough as businesses scaled back during the various lockdowns.


But businesses are now opening up again, which has caused an unusual spike in wage growth as workers go back to full pay.

Official figures show average UK earnings grew by an annual 7.3% in the March to May period. The Office for Budget Responsibility (OBR) expects this to rise to 8% in the May-July quarter, the period used to determine the state pension rise.

Electricity and butane gas price rises have all affected the incomes of British ex-pats in Spain and news of the rise is welcomed.


 


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Ron actually started his working career as an Ophthalmic Technician- things changed when, during a band rehearsal, his amplifier blew up and he couldn’t get it fixed so he took a course at Birmingham University and ended up doing a degree course. He built up a chain of electronics stores and sold them as a franchise over 35 years ago. After five years touring the world Ron decided to move to Spain with his wife and son, a place they had visited over the years, and only bought the villa they live in because it has a guitar-shaped swimming pool!. Playing the guitar since the age of 7, he can often be seen, (and heard!) at beach bars and clubs along the length of the coast. He has always been interested in the news and constantly thrives to present his articles in an interesting and engaging way.

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