RETIREES are in line for a pay rise as state pension rates will increase next year.
Payments will increase by 3.1% from April 2022 to keep up with the rising cost of living.
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Millions of Brits get the payments when they reached state pension age – currently 66 for both men and women, but set to rise in the future.
In 2028 it will go up to 67 and then 68 between 2044 and 2046, though it could be earlier.
For now though, the benefit can be claimed when you turn 66 although you can delay to increase the amount you get.
The amount of state pension you get depends on your age, when you retired and your record of National Insurance contributions (NICs).
There are two different systems that apply as the way the state pension works changed from April 6, 2016.
Those who reached state pension age before this date, get the old state pension, known as the basic state pension.
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Under this system you may also get extra, and it’s split into four categories – A, B, C, and D.
- A – a contributory payment which includes the basic pension and an additional earnings element, dependent on the claimant’s NIC record.
- B – a contributory payment, dependent on NICs paid by a spouse or civil partner.
- C – a non-contributory payment, with very few (if any still) being claimed.
- D – a non-contributory payment for some individuals over age 80, subject to certain conditions.
The pension paid after this date under the new system is known as the new state pension.
If you’ve accrued National Insurance contributions under both the old and new systems, you’ll receive a state pension based on a mix of both.
Here are the current rates for both and the new amounts next year.
How much is the state pension in 2022?
New state pension per week
- Full rate: £179.60 rising to £185.15 in 2022
You usually need 35 years of NICs to get the maximum and at least 10 years to get anything at all.
If you don’t have the full amount than the amount of state pension you get will be lower.
Old state pension per week
- Category A or B basic pension: £137.60 rising to £141.85 in 2022
- Category B (lower) basic pension – spouse or civil partner’s insurance: £82.45 rising to £85.00 in 2022
- Category C or D – non-contributory: £82.45 rising to £85.00 in 2022.
To get the full basic state pension you usually need 30 years of NICs. If you have less than this then the mount you get will be lower.
What is the state pension triple lock?
The state pension rises each year so that retirees can keep up with the cost of living, which generally increases over time.
Usually the amount rises according to a formula known as the triple lock
It was introduced by the coalition government in 2010 and sees pension payments increase in line with whichever of the following is highest:
- earnings – the average percentage growth in wages in Great Britain
- prices – the rising cost of living in the UK, as measured by the Consumer Prices Index (CPI)
- 2.5%
But the triple lock has been scrapped for one year due to the impact of the Covid pandemic.
Instead the triple lock will be replaced with a double lock promise – for just one year.
That means the state pension will rise by the rate of inflation, which was 3.1%and higher than 2.5%.
Wages have soared by around 8% since lockdown ended, which would have forced the Chancellor to find billions of pounds extra to fund pensions.
Many other benefits will rise by 3.1% next year too – check out the full list.
Meanwhile pensioners on low income could get extra help from Pension Credit – here’s how.
Pensions will rise by rate of inflation next year as triple lock broken, DWP boss confirms
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