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Pensions Act 2007

Section 7: Removal of link between lower earnings limit and basic pension

163.This section amends sections 5 and 176(1) of the SSCBA1992. The effect of the amendments made by subsections (2) and (3) of the section is to remove the link between the amount of the lower earnings limit and the weekly rate of the basic state pension in a Category A pension, thereby ensuring that the amount of the lower earnings limit will not be required to automatically increase in line with earnings. Instead, any future increase in the lower earnings limit will be at the discretion of the Treasury.

164.Subsection (4) provides that these amendments have effect in the tax year following the designated tax year (i.e. as from the first year in which the basic pension is uprated by earnings) and subsequent tax years.

165.Subsection (5) provides that regulations setting the rate of the lower earnings limit in relation to years following the designated tax year will be subject to the affirmative procedure.

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