Older state pensioners will see their weekly payments rise by 3.9% to £192.10, bringing the annual total to £9,989, following the Triple Lock increase announced by the DWP.
The boost applies to pensioners who retired and became eligible for the state pension before April 2016. Their weekly payments will increase from the previous £184.90 to £192.10, effective from April 6. This assumes a maximum National Insurance record, typically around 30 to 35 years.
At the new rate, the pension payments are worth £9,989 per year, which averages out to £27.44 per day. Those with incomplete National Insurance records will receive lower amounts, calculated on a case-by-case basis when they first reach state pension age.
New State Pension Increase
New state pensioners, those who reached retirement age after April 2016, will see their maximum weekly payments rise from £230.25 to £241.30 per week.
Although the older basic state pension remains several thousand pounds lower than the new state pension, older pensioners can boost their income through additional DWP rules.
Pension Credit and Additional Pension
Pension Credit is available to both older and new state pensioners to top up their income. For example, an older state pensioner qualifying only for the basic state pension receives £192.10 per week, but Pension Credit can raise this to more than £240 per week, only a few pounds less than the new state pension rate of £250.70 from April.
Other income, such as work earnings, property income, savings interest, or a private pension, is counted first, and the full amount may not be available if income limits are exceeded.
Older state pensioners can also continue receiving Additional Pension (AP) schemes, such as SERPS and Second State Pension. Although these schemes are no longer open to new members, those enrolled through their employer before retirement still receive AP amounts weekly on top of their basic pension.
Pensions Tax Allowance
The Chancellor has announced the Pensions Tax Allowance, effective from April. This provides a tax exemption up to the value of the full new state pension, which will be £13,037 from April. The allowance applies equally to new and old state pensioners and to all types of income.
