The Department for Work & Pensions (DWP) spending on the state pension is still increasing, despite age equalisation between men and women.
According to a memorandum document sent by the DWP to the Work & Pensions select committee, published yesterday (23 April), the inflation increase is to blame for the increase in the state pension bill.
The government will be spending £96.6bn in 2018 to 2019, according to the DWP's estimate, 3 per cent more than the forecast value in 2017 to 2018.
The DWP said: "Increases to state pension more than account for the net increase in spending on pensioner benefits in 2018 to 2019.
"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."
Under the current triple lock system, the state pension increases each year in line with whichever is the highest: consumer price inflation (CPI), average earnings growth or 2.5 per cent.
This year, the state pension has gone up in line with consumer price inflation, which hit 3 per cent in September.
For many years, the age at which individuals can claim your state pension benefits was 65 for men and 60 for women.
But under the Pensions Act 2011, women's state pension age started increase more quickly to 65 between April 2016 and November 2018, with the exact date depending on the month they were born.
According to the DWP, the 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, by 1.7 per cent.
According to Nathan Long, senior pension analyst at Hargreaves Lansdown, raising the state pension age will keep the cost of this crucial benefit from spiralling out of control in the long term, although this does not mean that there will not be year on year increases.
He said: "With inflation running at more than 2.5 per cent, the extra protection of the triple lock has not been needed this time round."
More changes in the state pension age are expected in future years, at the same rate for men and women.
From December 2018, it will start to increase to reach 66 by October 2020. Between 2026 and 2028, it will increase again to 67.
In July, the DWP decided the increase in the state pension age should be brought forward to 68 between 2037 and 2039 because of increases in life expectancy.
The change will leave 7.6 million people £10,000 worse off, according to analysis by the House of Commons Library.
maria.espadinha@ft.com
