State pension rise to £586 for over 60s urged in new campaign | Personal Finance | Finance

A new online petition has gained thousands of signatures demanding a trio of reforms to the state pension system. The move, if approved, would change the state pension age, boost payment rates to match the National Living Wage, and extend these updates to expats. Spearheaded by Denver Johnson, the petition is live on the Parliament website.

The proposal laid out in the petition would see state pension payments rise to £568.08 per week, amounting to £30,476 annually. It also calls for lowering the state pension age to 60 and ensuring expats receive yearly increases in line with those living in the UK. It currently has more than 3,000 signatures at the time of writing.

Once the petition hits 10,000 signatures, it will trigger an official response from the UK Government, as highlighted by the Daily Record. Should it gather 100,000 supporters, the Petitions Committee will consider it for a debate in Parliament.

The petition’s message reads: “We want the Government to make the State Pension available from the age of 60 & increase this to equal 48hrs a week at the National Living Wage.

“We think that Government policy seems intent on the State Pension being a benefit not paid to all, while ever increasing the age of entitlement. We want reforms to the State Pension, so that it is available to all including expatriates, from age 60, and linked to the National Living Wage, for security.”

Currently, the full new state pension stands at £221.20 weekly, or £176.45 for those on the full basic State Pension. This proposal aims to unify these figures into a single “universal state pension” for everyone aged 60 and over.

Only about half of those claiming the new state pension receive the full amount. This is because the amount you get is based on how many years you’ve paid National Insurance or received National Insurance credits.

To receive the full new state pension, you need 35 qualifying years. Both state pension rates are increased every April in line with the triple lock mechanism which guarantees it will rise by the highest of three figures: inflation, wage rises or 2.5%.

Experts are forecasting a 5.2% increase next April, based on the current wage growth in the UK. This would leave people with £242.90 per week next year on the new state pension and £186.25 per week on the basic state pension.

However, nearly half a million Brits don’t benefit from this increase because they have retired in a country that doesn’t have a reciprocal agreement with the UK government. These expats see their state pension frozen at the level it was when they left the UK.

This uplift would also be applied to some 453,000 retirees whose State Pension has been frozen at the point of emigration because the country they now live in does not have a reciprocal agreement with the UK Government. Some are left on as little as £20 per week, according to the End Frozen Pensions campaign.

The proposal would ensure these retirees would be uprated each year like their counterparts living in the UK. However, it could also result in retirees being liable for income tax.

Earlier this year, Labour confirmed that the Personal Allowance, the amount most people can earn each year before paying income tax, will be frozen at £12,570 until April 2028, as reported by the Daily Record.

The current new and basic state pension rates are only a few hundreds pounds away from this allowance threshold at the moment. If state pension payments were to match the National Living Wage, it would exceed this limit and most likely make retirees liable for an income tax bill.