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PBR: Darling boosts basic state pension by 2.5 per cent

Chancellor Alistair Darling has committed to increasing the basic state pension by 2.5 per cent in April, despite RPI inflation being negative in September.

Announcing his pre-Budget report plans today, Darling said: “For the first time in half a century the retail prices index has been negative for much of this year. Many benefits and tax credits are linked to the September RPI.

“RPI inflation last September was minus 1.4 per cent. This would have meant no increase in these benefits in April. I do not believe such a freeze would be fair. So I can confirm the basic state pension will not be frozen but will rise by 2.5 per cent, 4 per cent in real terms.”

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