State pension rises and SERPS becomes S2P

State benefits rates went up this month, with the basic pension going up from £72.50 a week to £75.50.

The rate for a couple (if a wife doesn't qualify on her own contributions) rises to £120.70, up from £115.90.

Normally benefits rise in line with the retail price index in the 12 months to the previous September. However, for the second year running the government has opted to increase state pensions by more. Inflation in September 2001 was only 1.7% and this would have meant an increase of only £1.24 a week on the single pension.

This month also effectively sees the end of the State Earnings Related Pension Scheme (SERPS) and the introduction of the new Second State Pension (S2P). SERPS entitlement built up so far will be protected while the S2P will provide better benefits for the lower paid.

* For more on state benefit changes see the Labour Research Department's State Benefits 2002, £4.75 from LRD, tel: 020 7928 3649.