State pension and Isa allowances to rise

15 October 2013

The basic state pension is to increase by £3 to £113.10 a week from 2014, while the government has confirmed that Isa limits will also rise.

The UK's key benefits and allowances are linked to the September inflation rate, as measured by the Consumer Prices Index, which was revealed to be 2.7%, according to the Office for National Statistics.

This means the state pension will next year be worth £113.10 a week compared to the current £110.15.

ISA contributions will increase to £11,760, from a current £11,520, while Junior Isa contributions will increase to £3,840 from £3,720.

This week's best cash Isa rates

Housing benefit will rise by 2.7%, as per September's inflation rate.

Critics claim that the risers will no little to alleviate the current "cost of living crisis", where soaring food and energy prices along with stagnant wage inflation has put increasing pressure on household finances.

Tom McPhail, head of pensions research at Hargreaves Lansdown, said: "The Universal Pension Allowance is still £3,600 and falling woefully behind against rising prices.

"This is an important allowance widely used by non-earning spouses, those taking career breaks and children. Had this increased by RPI (retail prices index) inflation it would now be over £5,289."

Add new comment