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The 2002 Budget and Pensions
Barnett Waddingham's summary of Gordon Brown's April 2002 Budget.
There was little in the budget which has a direct effect on occupational or personal pension plans. The Chancellor did review State pension benefits, as described below.
Pensions summary
Basic State Pension (BSP) increased by £3.00 a week for single pensioners (up to £75.50 pw) and £4.80 for couples (up to £120.70 pw).
Target future increases in the BSP of at least 2.5% per annum (at least £100 a year for a single pensioner).
Five million pensioners to gain from Pension Credit of about £400 a year.
Elderly taxpayers will be able to set the first £6,010 of income against tax, and £6,740 if 75 or over.
The pensions cap had previously been set at £97,200 for 2002/2003.
Pensions part of the budget speech in full
"Mr Deputy Speaker, last November the Secretary of State for Work and Pensions and I set out the new financial measures to ensure pensioners have dignity in retirement. No matter what the rate of current inflation, the Basic State Pension will increase by at least £100 a year every year. And this year it is rising by even more than that: £3 a week for singles, £4.80 for couples.
From next year 5 million pensioners stand to gain from the Pension Credit by on average £400 a year more per household: 8 pounds a week extra. And for the poorest single pensioner, extra help will guarantee a minimum income this year of £98.15 and from next year at least £100 a week.
For pensioners who have occupational pensions, small earnings or savings and who pay tax I am also able to do more with my announcements today.
The age related personal allowances will be raised in 2003-4 far faster than inflation.
An elderly taxpayer will be able to set the first £6,610 of their income against tax - and the first £6,740 of their income for those aged 75 or more.
As a result of this rise in the personal allowance, 170,000 pensioners will no longer be liable to pay income tax.
And as we maintain the free TV licences for all pensioners aged 75 and over, the Winter Fuel Allowance will be paid this year at £200 and in every year of this Parliament."
Barnett Waddingham, April 2002.