The 2.5 per cent increase to the state pension announced in last week’s Pre-Budget Report will not apply to all components of the payment.
Speaking to the BBC, pensions minister Angela Eagle confirmed that parts of the pension, including the State Earnings Related Pension (Serps), would be frozen from April 2010.
Instead, only the basic component of the pension will see the 2.5 per cent increase.
Ms Eagle explained that this decision was to eliminate "confusion" between public and private pensions.
Serps are linked to private pensions, many of which are expected to be frozen next year due to the financial pressures of the credit crunch and recession.
Also talking to the broadcaster, a government spokesperson added: "During these tough times it’s vital our support is targeted at the state pension which helps all pensioners, as well as carers and disability benefits where it’s going to make the most difference."
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Posted by Richard Planner
