Indexation

Benefits Uprating 2020

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Wednesday, February 5, 2020
Gordon Brown, Pension Credit, Price indices, Economy, Tax credit, Indexation, Economics, Money, State Pension, Retail price index

This note sets out the main benefit and tax credit rates for the 2020/21 financial year.

Key Points: 
  • This note sets out the main benefit and tax credit rates for the 2020/21 financial year.
  • Indexation of benefits in line with the Consumer Prices Index (CPI) resumes for all inflation-linked benefits and tax credits this year, resulting in a 1.7% increase.
  • This follows a four-year period (2015/16-2019/20) during which most working-age benefits (except for disability and carers benefits) were held at their 2015/16 cash value, and a three-year period before that (2013/14-2015/16) when increases were limited to 1% per annum.
  • For the purposes of the 2020/21 uprating, earnings growth (+3.9%) was the highest of these three benchmarks, meaning that:

    Pension Credit Guarantee Credit is required to increase at least in line with earnings.

Public service pension increases

Retrieved on: 
Wednesday, February 5, 2020
Economy, Money, Finance, Indexation, Inflation, Pension, Guaranteed Minimum Pension, Pensions in the United Kingdom

HM Treasury, Guidance on the operation of increase legislation for public service pension schemes, April 2016).

Key Points: 
  • HM Treasury, Guidance on the operation of increase legislation for public service pension schemes, April 2016).
  • GMP increases

    Until April 2016, the main public service pension schemes were contracted-out of the additional State Pension.

  • For public servants, there were special arrangements to ensure that public servants received indexation on their GMP, while preventing double increases.
  • While it looks for a permanent solution, the Government has put in place temporary arrangements, committing to full indexation of GMPs earned in public service for people who reach State Pension before April 2021 (HM Treasury, Consultation on indexation and equalisation of GMPs in public service pension schemes, updated January 2018).