Eligible Brits are slated for a hefty cash boost following changes to the state pension, which is increasing by 4.1 per cent this April – in line with rising wage growth
Millions of Brits will be entitled to a hefty boost to their bank accounts despite the financial sting of ‘Awful April’. Every year, the state pension increases in line with the triple lock promise – which guarantees the amount Brits receive will jump by whichever is higher out of inflation (using the previous September inflation figure), wages (average growth between May and July) or 2.5 per cent.
This month, state pension payments will therefore increase in line with rising wage growth, which was announced as 4.1 per cent. However, the additional amount you will actually receive depends on several factors, including the type of state pension you claim and your National Insurance record.
Those on the full, new flat-state pension (for Brits who reached the state pension age after April 2016) will see an annual increase of £472 a year – while those on the old basic state pension (for those who reached the state pension age after April 2016) will get a smaller £363 bump. In general, you will need 35 years of qualifying National Insurance contributions to be eligible for a full state pension.
READ MORE: HMRC urges Brits to claim £1,300 household boost ‘as soon as they can’
The cash boost will come into effect on Sunday, April – which marks the start of the new tax year. After this, those on the new state pension will see their £221.20 weekly payments go to £230.30. Similarly, those on the older basic state pension will see weekly instalments change from £169.50 to £176.45.
Again, these are the maximum amounts you could technically receive from a state pension. However, if you have gaps in your National Insurance contributions (for example, because you lived abroad for a while or took time out of work to care for children) you may receive less.
From April 6, you will only be able to make voluntary NIC payments to boost your state pension for the previous six years. Previously, Brits could backdate all the way back to 2006.
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Pension Credit – am I eligible?
Those on a weekly income of less than around £218 per week (or £235 for a couple) who are above the retirement age may also be entitled to Pension Credit in addition to the basic state pension. It is thought a staggering 425,000 people over the age of 75 qualify for this benefit, but are not currently claiming it.
From April 6, Pension Credits will also increase by 4.1 per cent, topping your weekly income to £227.10 if you’re single and £346.60 if you have a partner. This is a rise of £465 and £710 respectively.
Savings and investments of £10,000 or less will not impact your Pension Credit. However, if you have more than the threshold, every additional £500 will count as £1 income each week. For example, if you have £11,000 in savings, this counts as £2 income a week.
You can use the government’s Pension Credit calculator to check your eligibility here.
Is the State Pension boost enough? Have your say in the comments section below