Budget: Earnings link with pensions to be restored

Help

The link between the basic state pension and average earnings is to be restored from next year, the Chancellor has said.

From April 2011 the link will return, with the pension guaranteed to rise in line with earnings, prices or 2.5%, whichever is the greater.

The old link between average earnings and the state pension was cut in 1980, and replaced with a link to inflation as measured by the Retail Prices Index.

READ MORE: Osborne increases VAT rate to 20%

READ MORE: The Budget, June 2010

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.