The basic state pension will rise by 10.1% from April, after the UK’s Chancellor committed to the return of the triple lock in his Autumn Statement.
Under the 1977 reciprocal agreement, the island is duty bound to ensure that people who reached state pension age before April 6, 2016, receive the same as the rates of UK state pensions.
During his statement, Chancellor Jeremy Hunt confirmed the Tories’ commitment to the triple lock, which ensures pensions rise by either the September rate of inflation, the average increase in wages across the UK or 2.5%, whichever is higher.
In September the UK recorded a 10.1% inflation rate. The rate of the pension paid is based on how many years of National Insurance have been paid by that person.
A Treasury spokesman said: ‘The Treasury has noted the financial statement by the UK Chancellor and the comments around personal taxation and public spending. The Isle of Man Government has already committed to reinstating the triple lock upgrade of pensions, and the level of public spending including benefits will be detailed in next year’s Budget.’
Mr Hunt also confirmed that benefits in the UK will also rise by 10.1%.
Other areas that will likely be of interest to islanders is that the UK’s national living wage (minimum age), will rise to £10.42 an hour from April 1. Currently the Manx minimum wage is £9.50 an hour, with the discretionary living wage currently calculated at £11.05 an hour.
Meanwhile, the UK Chancellor said that from 2025 environmental vehicles will no longer be exempt from vehicle duty. The Manx government has flip flopped on this several times in recent years. Last year a plan to introduce a £50 a year vehicle duty for EVs was axed after public pressure.