Dec 5, 2022

On 17 November 2022, Chancellor Jeremy Hunt announced the Autumn Budget under the new Prime Minister, Rishi Sunak. So what does this mean for pensions?

He announced in his opening remarks: “In the face of unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future. So today we deliver a plan to tackle the cost-of-living crisis and rebuild our economy. Our priorities are stability, growth and public services.”

He also said, within his closing remarks, that the government would protect the pensions’ Triple Lock.
The ‘Triple Lock’ was introduced in 2010, and designed to ensure the State Pension value would not be impacted by cost of living rises. 

Autumn budget breakdown for pensions

• In April 2023, the State Pension will increase in line with the ‘Triple Lock’ — this means State Pensions will rise in line with inflation, which was 10.1% in September. This will lead to a record increase in State Pensions. State benefits will also rise in line with inflation


• The outcome of the review of the State Pension age is to be published early 2023. ‘State Pension age’ means the age you can start receiving your State Pension from the government. This is separate from your workplace pension or any other personal pensions you may have. Reviewing the State Pension age came as a result of the latest life expectancy data and other factors.
  
  The first review of the State Pension age was undertaken in 2017, determining that the next review should consider whether the increase to age 68 should be brought forward to 2037-39 before any changes to the current legislation.
  
  The current State Pension age is 66. Two more increases have already been set out in legislation, including a moderate rise to 67 for those born on or after April 1960, and also a rise to 68 between 2044 and 2046 for those born on or after April 1977

• The income tax personal allowance, higher rate threshold, main National Insurance (NI) thresholds, and the inheritance tax thresholds will be frozen until April 2028

What does this mean for my Railways' pension?

There are rules which govern the way in which the economic changes — for example, inflation — link to your BTPFSF pension. Railway pension benefits in payment or preserved are reviewed each year and increases according to orders published by the government. Preserved pension benefits means you no longer pay into the Scheme and haven't yet claimed your benefits. 

In recent years, the increases have been in line with the Consumer Prices Index, also known as CPI, figure from the previous September. We will be able to confirm what the increase will be for your pension benefits when the government Order is published, which is normally in March. 

We are committed to supporting you throughout your pension journey and helping you to understand your benefits, while keeping you in the loop when it comes to any changes. We will inform you as soon as possible if any changes following the announcement will impact your pension.