Andy Wood, International Tax Consultant at Tax Natives, noted that the £470 increase was a much needed “boost” in the current economic climate
State pensioners will see their Department for Work and Pensions (DWP) payments rise by up to £470 this April.
The state pension is subject to an annual rise each year under the triple lock promise. This ensures it increases by either inflation (based on the previous September’s figure), wage growth (average increase between May and July), or 2.5% – whichever is the highest.
It was confirmed by the Chancellor last year that state pension payments will be boosted by wage growth – which sat at 4.1% – from next month. Andy Wood, International Tax Consultant at Tax Natives, noted that the £470 increase was a much needed “boost” in the current economic climate. He said: “For those on fixed incomes, every pound counts, and the adjustment to the state pension rates demonstrates the critical role the triple lock plays in safeguarding pensioners’ financial stability. However, pensioners need to know which rate applies to them, as the new state pension and basic state pension differ significantly in value.”
How much your state pension payments will rise by depends on which one you get. There are two types of state pension, which are determined by your birth date.
Men born on or after April 6, 1951, or women born on or after April 6, 1953, can claim the new state pension. Currently valued at £221.20 per week, or £11,502 annually. This will rise to £230.30 weekly, or £11,975 annually, from April. Those born before these dates can claim the older basic state pension, currently worth £169.50 per week, or £8,814 annually, set to increase to £176.45 weekly, or £9,175 annually, from April.
However, your exact state pension amount depends on your national insurance record. Most people need 35 qualifying years on their National Insurance record for the new state pension to receive the full amount, and typically ten years to get anything at all.
Andy added: “While the increase is helpful, the disparity between the two systems remains a challenge, especially for those who retired under the older scheme.”
The new state pension is usually paid every four weeks into an account of your choice. The state pension rise will come in from the first Monday of the next tax year – which this year is Monday, April 7. The new tax year starts on Sunday, April 6. Pensioners are paid in arrears for the previous four weeks – which is why April’s payment increases won’t be paid in full until May.
The DWP applies the same approach each year, meaning that people receive the same rates of the state pension for an equal number of weeks, regardless of their payday. Under the DWP rules, the day your state pension is paid depends on your national insurance number, which is specifically the last two digits and it follows:
- Paid on Monday – 00 to 19
- Paid on Tuesday – 20 to 39
- Paid on Wednesday – 40 to 59
- Paid on Thursday – 60 to 79
- Paid on Friday – 80 to 99
Andy noted that pensioners needed to reassess their budgets and how the rise could affect them. He added: “It’s also a good opportunity to check whether they qualify for additional benefits, such as Pension Credit or Attendance Allowance, to maximise their overall income. Being proactive about financial planning can help pensioners make the most of these changes.”
