Govt estimates 2019/20 pension benefit expenditure at £120bn

The government has estimated that it will spend over £120bn on pension benefits in 2019/20, including £99bn of expenditure on the state pension.

The figure was revealed by Pensions Minister Guy Opperman in an answer to a written question, which asked what steps the Department for Work and Pensions (DWP) was taking to ensure people over the age of 75 are being supported financially.

Opperman again reiterated the DWP’s commitment to the triple lock “for the remainder of this parliament” as it “guarantees that up to the full amounts of the basic and new state pensions will rise by the highest of average earnings growth” and price inflation.

In 2019/20, the increase will be 2.6 per cent.

In defense of the triple lock, Opperman noted that the full rate of the basic state pension will be worth “over £1,600 more in 2019/20 than in 2010 in cash terms", which he claimed is £675 more than if it had increased only in line with earnings.

However, in April, a House of Lords committee urged the government to scrap the triple lock as it was “unsustainable”.

Furthermore, the TaxPayers’ Alliance said that the triple lock was “egregiously unfair” as it meant that the state pension was rising at too fast a pace “at a time of spending restrictions on young people”.

In his answer, Opperman also cited the standard minimum guarantee in pension credit increasing by earnings as a way pensioner income will rise.

He said: “This will be the equivalent of over £1,800 per year higher in cash terms for single people and over £2,700 per year higher in cash terms for couples than it was in 2010.”

However, in January, Royal London accused the government of "sneaking out" changes to pension credit in relation to mixed age couples that could cut benefits by over £7,000 per year.

    Share Story:

Recent Stories


Bulk annuities during coronavirus
Laura Blows speaks to Just business development manager Prash Mehta about the impact of coronavirus on transactions

Investing in infrastructure
Laura Blows speaks to James Dawes about how, and why, pension funds should be looking at infrastructure as an investment opportunity

Re-shaping the future of fiduciary management?
Pensions Age Editor, Laura Blows, speaks to River and Mercantile co-head, Ajeet Manjrekar, about the future of fiduciary management in the UK

GLOBAL EQUITIES: CURRENT PERSPECTIVE AND OUTLOOK
Pensions Age Editor, Laura Blows, speaks to Christopher Rossbach, CIO and Portfolio Manager of the J. Stern & Co. World Stars global equity strategy about the investment opportunities for global equities in these unprecedented times.