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State pension costs continue to rise

DWP-Department-for-work-and-pensions-500x320.jpgThe Department for Work and Pensions expects to spend £96.6bn on the state pension in 2018/19, a 3 per cent increase on the year before.

The DWP has detailed its cost estimates in a memorandum sent to the work and pensions select committee, published on its website yesterday.

The latest forecast for state pension costs in 2017/18 are £93.8bn but this is set to increase in 2018/19.

The memorandum says increases to state pension “more than account” for the net increase in spending on pensioner benefits in 2018/19.

It says: “Although the caseload is broadly flat, influenced by the equalisation of the state pension age, both basic and additional state pension are being uprated by 3 per cent, in line with the “triple lock”/September 2017 Consumer Prices Index inflation.”

It adds: “State pension age equalisation has a more significant effect on pension credit and housing benefit paid to pensioners, which will fall by 7.7 per cent and 7 per cent respectively. Winter fuel payments expenditure is also set to fall slightly.”

Last year, the Government also decided to bring forward the increase in the state pension age to 68 by seven years.

Adopting the recommendations of the Cridland review into state pension increases, the Government confirmed the state pension age will rise from 67 to 68 from 2037.

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